Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I present the third report of the Select Committee on the National Broadband Network, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

by leave—I move:

That recommendation no. 12 contained in the report, adding a further term of reference, be adopted.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

My understanding of this motion—and it is not clear because Senator Fisher has chosen not to speak to this motion—is that the opposition is seeking to extend the terms of reference for the Select Committee on the National Broadband Network. Certainly it has been previously discussed by the committee that this reference would be more appropriate to the Senate Environment, Communications and the Arts References Committee, given the nature of its business and the history of the environment, communications and the arts committees inquiring into telecommunications and related matters. That understanding certainly changed a little while ago; hence the seeking of the reference here and the opposition senators’ recommendation, contained in their majority report, to seek to extend the reference. The government is of the view that the committee is not the best environment for these references to proceed in and has expressed the view both within the committee and generally in relation to this reference that the matters would be better referred to a new inquiry, if the opposition and crossbench so wish, to the Senate Environment, Communications and the Arts References Committee. In that regard, the government does not support the motion to extend the reference. I understand that I will get an opportunity to make comment with regard to the report that has now been tabled.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

The Senate Select Committee on the National Broadband Network has, by all views, done a very constructive job and tried to be reasonably apolitical in its approach to investigating and inquiring into the government’s National Broadband Network policies. This committee has been able to look at the government’s promise to spend $43 billion of taxpayers’ money rolling out a national broadband network. As part and parcel of its policy commitment, the government thus far has not provided a cost benefit analysis of its National Broadband Network plans. In particular, Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, told the Senate in answer to a question on notice on 17 August that issues critical to the fate of the National Broadband Network—such as the amount that the government will contribute to NBN Co., the strategies that the government has in place to encourage private investment in the National Broadband Network, the phasing and cost of the rollout of the National Broadband Network and the provision of a business case for the building of the National Broadband Network—would be referred to the implementation study.

Moreover, the government has promised to deliver fibre to the home for 90 per cent of Australians. Ten per cent of Australians, the government says, will get something else. We still do not know who is in that 10 per cent, because the government has said that towns of over a thousand people would get fibre to the home. Towns of over a thousand people account for about half a million Australians and, at last count, 10 per cent of the Australian population was some 2.2 million people, so what about the other 1.7 million people who are in the 10 per cent but supposedly not part of the 1,000-people rollout?

The government has not answered those questions and Minister Conroy, in answer to the question on notice on 17 August, deferred the answer to most those questions to the implementation study. We are still awaiting the outcome of the implementation study. My motion seeks the extension of the terms of reference of this select committee—which is focused entirely upon the National Broadband Network, comprises a group of people who now have significant experience in considering aspects of the National Broadband Network and is focused on just that—to the end of April next year because of the critical issues which the government has deferred to be determined by the implementation study, upon which we still wait.

This implementation study would largely have been done by the time originally forecast for the termination of this select committee, but now the government says that the implementation study will be delivered by the end of February next year. That delay compels that this committee is the right vehicle to assess and inquire into the implementation study on which the government is hanging so much off critical to a $43 billion spend. It then allows some four weeks during March for the government to respond to the implementation study, which it now says is due at the end of February, and then allows the committee some four weeks during April to inquire into and deliver what would be its final report.

On that basis it is proposed by way of this motion to include a recommendation in the report that seeks to extend the term of the committee to the end of April next year. This will enable the committee to inquire into the implementation study and, once delivered, allow the government to respond to the implementation study and allow the committee four weeks to hear from stakeholders in the field about what they think of the implementation study, particularly given that Minister Conroy has passed off answering all the key questions about the who, what, when, where, why and how of a $43 billion spend of taxpayers’ money to this much awaited implementation study.

Question put:

That the motion (Senator Fisher’s) be agreed to.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the report.

I would also like to make a few brief comments on the third report of the Select Committee on the National Broadband Network and look forward to some of my colleagues on the committee doing likewise. It is with much pleasure that I rise to speak to the report. The committee has, as I said earlier, been very constructive and apolitical in approaching what could have been a rather different exercise in having a look at one of the most ambitious infrastructure spends this country is now looking forward to.

In the process of delivering the third report and the work done of the committee thus far, on behalf of all committee members I want to thank very much the secretary of the committee, Alison Kelly. Alison is a professional who has dedicated a lot of professional passion to this report and to this inquiry, so much so that the poor girl—she cannot get over it; she is very tragic—is up there in the gallery today and has been for quite some time, looking on patiently waiting to see the report being handed down. Her passion has not stopped her being ever patient, particularly with this committee. I also want to thank, on behalf of the committee, others who have assisted Alison on the way through, those being Nina Boughey, Veronica Gover, Kyriaki Mechanicos, Meredith Bond, Claire Guest, Cassimah Mackay and Christine Tieu. Thank you to all. Thank you also, of course, to stakeholders and other interested parties who have contributed the some 102 submissions received by the committee during its inquiry thus far and the witnesses who have appeared at its 14 hearings thus far.

The government’s National Broadband Network round 1, if you like, was characterised very much by questions about which Australians were going to get what, when they were going to get it, how much it was going to cost taxpayers to provide it, how much consumers were going to have to pay for the services they were going to get, when they would get it and how they get would it. Subsequent to that, some months later, the Rudd Labor government unrolled a tenfold ‘spend’ to roll out a National Broadband Network, a promise of fibre to the home and a promise of speeds of up to 100 megabits per second at an infrastructure investment of some $43 billion. That was tenfold on the round 1, if you like, promise of $4.7 billion.

However, with the bigger promise come bigger questions. Much the same questions remain, but the answers to them are potentially much greater. Who is to be included, as I said earlier, in the nine per cent of Australians who will get fibre to the home and the 10 per cent of Australians who will get something else? Rural and regional Australia in particular are still grappling with working out what they will get, when they will get it and how they will get it, and they are struggling to see how they will have equivalent access to equivalent speed and equivalent services with a $43 billion National Broadband Network spend.

It seems that with the greater spend comes less transparency. The recently tabled Productivity Commission report said that the decision to build a National Broadband Network, although endorsed by Infrastructure Australia, was not based on a detailed cost benefit analysis, and, in regard to the framework used for assessing major infrastructure, the report said that the guidelines have not been universally applied. I have already talked about the continued deferral of issues such as this to the implementation study, but here we are at the end of some two years after the election of the Rudd government and with the expenditure thus far of about $100 million of the $43 billion projected spend yet the government has not delivered one extra megabit of speed or one additional user under its National Broadband Network policy. So this committee remains with a very important job to do. I am very pleased that the Senate has chosen to allow the committee to continue to do this job in respect of the very important components that we look forward to being answered as part of the finalisation of the implementation study and the government’s response to it. Thank you for this opportunity to speak to the third report. I know some colleagues have comments to contribute.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak on the third report of the Senate Select Committee on the National Broadband Network. I would like to pick up on the discussion relating to the extension of this committee that Senator Fisher chose to mention in her remarks as well. I think it is very important to reiterate when talking about the continuation of this Senate select committee in its current structure that it was a committee set up when the coalition had the majority in the Senate. Therefore, this committee is structured in such a way that neither a government senator nor indeed a crossbench senator need be present at this select committee for it to be able to conduct business. I believe it was certainly the preference and there was some consensus earlier—although that has obviously changed—to transfer effectively the consideration of the ongoing implementation of the NBN to the Senate Environment, Communications and the Arts References Committee as recently re-established by the Senate. Alternatively, apropos the discussion about select committees that has occurred with regard to other extensions to date, even the noncontinuation of this committee and the re-establishment of a select committee would afford better representation and a fairer structure of the committee than one which was generated under the auspices of the coalition having complete control. That would have been more respectful of Senate proportionality and our capacity to participate in this particular committee. That said, it is so resolved that the committee will continue.

I would like to take this opportunity to add my remarks on the report. I do not believe you can characterise the committee as apolitical, but I believe the sentiment that Senator Fisher was trying to convey was that there was a great deal of cooperation on behalf of all participants in an effort to get the best possible picture from all of the evidence. I do not think, however, that can be characterised as apolitical per se, because government senators have produced a minority report. We only agree with one of the recommendations of the majority report. That one recommendation was a very constructive one encouraging the government to invest more on and pay more attention to the sorts of applications that we will be able to access and use on a high bandwidth universal network once the NBN is built.

As Senator Fisher described the majority of the other recommendations related to demands for more information. The recommendations equivocated between demanding more action and criticising the government for having not done enough and reasserting the opposition’s claim that no legislation should proceed until more information is received. This is both unreasonable and contradictory in the presentation of those recommendations, and government senators do not believe that those recommendations are a fair summary of the evidence presented. It is true that there were pros and cons in the evidence presented, as you would expect, but I think that the majority report recommendations as prepared by the opposition are largely in tune with the opposition’s political strategy to obfuscate the progress of legislation associated with Labor’s National Broadband Network policy.

Perhaps that is never clearer than in the explicit recommendation that the current bill, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009—which Labor and certainly our Minister for Broadband, Communications and the Digital Economy, Senator Conroy, have argued is required to pass the Senate as soon as possible to make sure that the competitive playing field is a fair one through the period of the development of the National Broadband Network—not proceed. So our primary comment as government senators is that there appears to be a contradictory message contained within the majority report. On the one hand it is, ‘Hurry up and get on with the job,’ and on the other hand it is, ‘Hang on. Don’t do anything until more information has been provided. Don’t do anything with the legislation needed to improve competition and consumer protection and don’t do anything until this particular committee has been provided with information that in large part the government has concluded is both unreasonable and tied to the political strategy to obfuscate Labor’s plan to build the National Broadband Network.’

In closing, I would like to thank the secretariat of the committee. Technology related issues are often quite complex and challenging when it comes to preparing a report. I would also like to thank my fellow members of the committee. It is always fascinating and interesting to me. I would also like to join with the chair, Senator Fisher, in thanking all of the witnesses who appeared to give evidence. Many of them have appeared more than once, given this is the third report of this committee, and I for one, as do all other members of the committee, appreciate the time and commitment of all of those providers of submissions and of evidence at the hearings around the country.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

I rise to make some comments about the third report of the Senate Select Committee on the National Broadband Network. Firstly, I think the work of the committee and the secretariat in producing what is a very comprehensive report into the NBN, as we see it at this stage, has been very good indeed. I just say at the outset that many will know that I have a long held view that a wholesale access infrastructure network would certainly be a positive step forward for the future of telecommunications in this country. My good colleague Senator Joyce and I co-authored an inquiry into regional telecommunications for the Page Research Centre before we even came into this place as senators and certainly from that point on we have had some very clear views about how telecommunications should operate, particularly in terms of delivering for the regions.

While I say that it is a very comprehensive report, there is obviously a lot of detail yet to come about the National Broadband Network and the rollout. One thing I would say is that with any NBN the rollout has to start in the regions. It has to be a roll-in arrangement, not a rollout from the cities. Certainly from the Nationals’ perspective, with any NBN, the regions are the areas where this has to start.

The report makes some comment particularly around the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. I will just make a couple of brief comments on that. There is some school of thought that believes this legislation exists only as a pathway to an NBN world. My view is different to that. I believe this legislation stands alone. While it does potentially provide a pathway to an NBN world, it certainly stands alone in dealing with the concerns and issues around the current regulatory environment as it relates to telecommunications. Certainly on that basis it needs to be considered as a separate entity, if you like, not as part of the whole NBN process that we may or may not get to next year.

The Nationals certainly believed, some time ago now, that Telstra should have been structurally separated. It is a view that I certainly still hold, and I understand my colleague in front of me here, Senator Joyce, also holds that view. We do not know when we are going to get to this legislation. We are very open minded about that legislation, particularly, from our perspective, on how that legislation is going to affect the regions.

There are also a number of comments around that legislation in the report in relation to separation not being a success in the UK. In actuality Ofcom has indeed stated that it has been a success. But I think the issue is that the current regulatory environment is not operating to provide a level playing field in terms of wholesale access for competitors in that marketplace. This certainly needs to be rectified. I have been on record many times saying that I do not believe the current regulatory environment is operating optimally, for want of a better word, and that we do need to ensure that those other carriers have a level playing field when it comes to access. If we are going to have a truly competitive environment where we have got a market that can indeed do that, then the structure needs to be in place for the regulatory environment for that competition to be able to ensue. I would also say that when we look at those areas where there is market failure, where there is a distinct problem in the regions, there is a role for government to ensure that there is equity of access and services for those people living in the regions.

I know others of my colleagues wish to speak, so I shall not speak any longer on that. I think it is vitally important that we do get the regulatory environment right for telecommunications. We do need to get it right because the future obviously is going to be a telecommunications world. We need to ensure that there is a level playing field not only for wholesale access but in terms of carriers being able to get out into the market and provide those services. We need to ensure that regional Australia is supported through the role of government and that those regions do get the telecommunications services that they need.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I rise to add my comments to those of my colleagues, who I think between them have collectively described very well the quite collegial nature of the Senate Select Committee on the National Broadband Network. I think it has done an enormous amount of really valuable work over the last year or so. Senator Lundy nailed down the divisions and the fact that this has been a very politicised committee. This is our third report, and each time we see a majority report and a handful of dissents, additional comments or minority reports, because unfortunately the issues have become very politicised.

I will quickly put on the record the reasons why the Greens voted against extending the terms of reference of the committee. They are very similar to the reasons that Senator Brown provided when we were voting on Senator Heffernan’s motion relating to the Senate Select Committee on Agricultural and Related Industries. There was an agreement in this chamber that when we went back to the old system of having legislation and references committees we would have a maximum of three select committees that would be activated on specific issues and for specific times. The intention certainly was not to have indefinite extensions of terms of reference and reporting timetables for select committees that may be operating for other reasons. So our reason for voting against the extension was simply that the proper place for this work is with the Senate Standing Committee on the Environment, Communications and the Arts, either the legislation or references committee. That is where these issues should go so that we are not duplicating effort with a committee which undoubtedly has skewed membership, with the crossbenchers not counting for quorums or even needing to turn up at all, although I have participated at quite great length. So we do not believe that the extension should have been passed. However, now that it has, I will continue to participate because we have done valuable work.

I suspect, on reading the early drafts of the report, that they probably read as quite a balanced assessment of the historical, technological and economic contexts of the assessment of the National Broadband Network. Unfortunately, what has been printed does reflect a tone of quite partisan bitterness and suspicion, which is a shame, because it does not really reflect very well on the collaborative and careful way in which the committee and its wonderful staff have undertaken research and field trips, and on the way we have conducted the hearings. Ms Kelly is still in the public gallery. I add a note of thanks to her from the Australian Greens for the extraordinarily diligent way in which she has conducted this work. I think a large measure of thanks are owed from all parties in here for the results that we read in the report.

When you read between the lines and filter out some of the politics it is still a good record of the history of how we got to where we are and the technology and some of the exciting ways in which the telecommunications future for Australia might actually look. We were quite supportive of the announcement in April by Minister Conroy and the Prime Minister that the request for proposal for a fibre-to-the-node network be abandoned and that a vastly more ambitious fibre-to-the-premises network be built and operated by the Commonwealth government. There is a need for this huge public investment, and there is a parallel process of quite painful telecommunications market reform, which I regret will not even be debated this year. It is not on the government’s list of priority legislation because the false debate on the Carbon Pollution Reduction Scheme has crowded it out. We know the reason this investment is even being contemplated is partly the dysfunctional state of telecommunications markets, resulting largely from the privatisation of the vertically integrated monopoly provider Telstra.

We stand by the comments made in our earlier contribution, our very first dissenting report that this committee tabled on 2 December 2008, in which we noted:

The Australian Greens urge the Government to hold its nerve with regard to the RFP, and insist on taking a majority equity stake in the National Broadband Network and operating it as a competitively neutral, open-access network.

Nearly 12 months later I am pleased to say that the government’s expanded proposal does meet these criteria, but there is always a catch. The report notes at 2.12 that the government intends to build the NBN with a colossal investment of public funds, and then privatise it all over again five years after it is operational. Nowhere have we seen any justification for this incongruous and retrograde policy which seems determined to repeat the mistakes of the past. It is one of the key issues which, when we finally get around to debating substantive NBN legislation next year—and I note that the parliament was meant to see at least an exposure draft or a draft of that legislation this year, but it appears that has now been taken off the table as well—we will be looking for the publication of the implementation study or an interim report of that implementation study which the committee has quite rightly called for to see if the government has bothered to provide any justification for the concept of privatising something again which is being constructed partly as a response to the failed privatisation of Telstra and the mess that it has created in telco markets over successive privatisations.

A lot of the debate since the announcement of the policy has turned on the absence of a rigorous cost-benefit analysis of the project. I quite vividly remember the first time that was put to the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, in question time, and his response was simply to laugh at the proposition. Our view on the issue is that a cost-benefit analysis is important but it risks becoming something of a red herring—and I think this is what it has become. We concur, as is canvassed in quite a bit of detail in the report, that an assessment of the project’s commercial viability is essential, particularly given the wildly divergent estimates of the wholesale costs of access to the network which have begun to flourish in the information vacuum that prevails today.

The questions of cost-benefit analysis were clouded, in my view anyway, by the presentation of Professor Ergas to the committee. He presented—which we appreciated—the only real attempt to conduct such a cost-benefit analysis to date. During the presentation, the impossibility of accurately monetising the quite intangible future benefits of an enabling network such as this were laid bare. We discovered that from an analysis of this kind—for this sort of network, for this sort of enabling infrastructure—you end up with a series of mathematical fudges and assumptions that are used to lend an appearance of rigour and precision where none actually exists. This was tacitly acknowledged by the Productivity Commission in their evidence, which is also outlined in the report.

One aspect of the project for which a detailed cost-benefit analysis would be valuable concerns the choice of either underground or overhead cabling. The report canvases these arguments quite well, and notes how difficult it was for the committee to get an accurate idea of the relative short- and long-term costs of the different options. The Greens believe that as much of the network as possible should be underground, for all the reasons stated quite concisely in the report, but until reasonable cost estimates are made available it is difficult to reach a final conclusion. An interim implementation study report as proposed by the committee before the end of this year—we have proposed by 31 December—would be an appropriate time to provide the public, service providers, contractors and interested parties with a costed analysis of the options of either underground or overhead cables, including the quite serious long-term benefits of undergrounding when you consider fire and other kinds of natural disasters and emergencies that can knock out communications networks as they become, more and more, essential services.

In the most recent round of hearings we heard evidence—at long last—that went to the question of what the network will actually be used for. The end user and the services that the NBN will host have so far been largely ignored in the debate, which has largely turned on questions of competition and market structure. It was therefore really refreshing to hear evidence given by various witnesses, which is covered in chapters 6 and 7, talking about what people are doing and what they can potentially do with applications around e-health, e-governance, smart grids, remote education and so on. For me some of the most rewarding time spent on the committee was hearing from people what they will use these services for.

The sessions left the committee in little doubt that as the network approaches ubiquity and hosts more and more services, it will approach the status of an essential service—and arguments were put to us that this has already occurred. Questions of equity then come to the fore, whether geographic or social. In an age of ubiquitous connectivity, the disconnected and the disadvantaged will find themselves further isolated on the wrong side of the digital divide. Apart from ensuring that backhaul and fibre-to-the-premises infrastructure targeted undeveloped and under-serviced areas first—the so-called roll-in from the edge rather than roll-out from the centre concept—the Australian Greens urge the government to undertake detailed consultations with social justice advocates and consumer groups to ensure that the network makes a strong contribution to social inclusion agendas. I think anything other than this would further entrench the digital divide.

The final chapter of the report dealing with proposals to undertake reforms of the telco markets is where the Australian Greens part company with the majority report. Our views on this bill are contained in our dissenting comments on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, which was to be debated in the closing sitting fortnight of this year. It is not on the government’s priority list anymore and we have heard no reasons for why that is the case. We undertook quite extensive negotiations on the government removing the legislative block that had been imposed on the debate around that bill, and yet no explanation has been provided to us as to why we will not be seeing that legislation.

We look forward to returning to this issue early next year. I look forward to continuing work with the committee if that is the vehicle in which these debates and discussions happen; I am certainly happy to be a part of this process. Lastly, I would like to thank everyone who gave evidence, gave up their valuable time in the various places where we held hearings. Once again, I acknowledge the really important work that Alison and the rest of the secretariat have done. We will pick up this work early in the new year.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

This is an excellent report on a very complex matter. Congratulations to Alison and her team and the secretariat. Congratulations to the chairman. Regrettably this very important debate had lots of speakers. We had six minutes from the chair, six minutes from the principal opposition speaker and 10 minutes from the Greens. This means the rest of us have 45 seconds to discuss this report.

Can I just emphasise two points in the 30 seconds left to me. One is the roll in and rollout, something I and most of my Liberal colleagues have been determined to see. It is an excellent idea. The government must roll it in rather than roll it out, and thereby serve the under-serviced areas rather than those that already have a good service. I also have a point about the undergrounding of power, and I know Senator Barnett wanted to talk about Tasmania, but regrettably there is no time.

Question agreed to.