Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

by leave—I move opposition amendments (2) to (11) on sheet 7133:

(2)   Schedule 1, item 10, page 4 (after line 23), after the second dot point, insert:

If a compliant optical fibre network is installed in such a fibre-ready facility, NBN Co will pay the cost of installation.

(3)   Schedule 1, item 10, page 6 (line 18), omit "the conditions (if any)", substitute "any technical standards and other conditions".

(4)   Schedule 1, item 10, page 6 (line 25), after "specify", insert "technical standards and other".

(5)   Schedule 1, item 10, page 6 (after line 26), after subsection 372B(4), insert:

(4A)   The Minister must consult the ACMA and relevant industry bodies before making an instrument under subsection (4).

(6)   Schedule 1, item 10, page 6 (line 28), after "paragraph (1)(b)", insert "or subsection (4)".

(7)   Schedule 1, item 10, page 8 (line 10), omit "the conditions (if any)", substitute "any technical standards and other conditions".

(8)   Schedule 1, item 10, page 8 (line 17), after "specify", insert "technical standards and other".

(9)   Schedule 1, item 10, page 8 (after line 18), after subsection 372C(4), insert:

(4A)   The Minister must consult the ACMA and relevant industry bodies before making an instrument under subsection (4).

(10)   Schedule 1, item 10, page 8 (line 20), after "paragraph (1)(b)", insert "or subsection (4)".

(11)   Schedule 1, item 10, page 9 (after line 4), after section 372C, insert:

372CA Purchase by NBN Co of installed optical networks

     Scope

(1)   This section applies in relation to the project area, or any of the project areas, for a real estate development project:

  (a)   that is compliant with Division 3; and

  (b)   in which a compliant optical network is installed by a person other than NBN Co.

NBN Co to purchase network if requested

(2)   The person or persons responsible for the real estate development project may apply to NBN Co for NBN Co to purchase the network in accordance with this section.

(3)   An application for the purchase of a network must be made within 3 months after the completion of the network.

(4)   The person or persons responsible for the real estate development project must provide NBN Co with such information and access as NBN CO requires to satisfy itself that the network is a compliant optical network.

(5)   NBN Co must purchase the network within 30 days after receiving the application.

Amount of payment

(6)   The amount of the purchase payment must be in accordance with a scale of payments determined by the Minister for this subsection and published in the Gazette.

(7)   The Minister must determine a scale of payments for the purposes of subsection (6) as soon as practicable.

(8)   In determining a scale of payments, the Minister must take into account:

  (a)   the typical costs of providing such networks or elements of such networks, including significant regional variations in costs; and

  (b)   the costs that NBN Co would have incurred had it undertaken to provide such networks itself.

Interpretation

(9)   For this section, a project area of a real estate development project is compliant with Division 3 if:

  (a)   section 372E or 372F applied to installation of a fixed-line facility in the project area; and

  (b)   any fixed-line facilities installed in the project area that were subject to subsection 372E(2) or 372F(2) complied with those subsections.

Note:   These subsections require that the facilities be fibre-ready and that the installation comply with an instrument under subsection 372E(4) or 372F(4), subject to exemptions under section 372K.

(10)   For this section, a compliant optical network of a project area of a real estate development project is a collection of optical fibre lines in the project area, each of which:

  (a)   is wholly or primarily used, or wholly or primarily for use, to supply one or more carriage services to either or both of the following:

     (i)   one or more end-users (whether or not identifiable) in one or more building units;

     (ii)   one or more prospective end-users (whether or not identifiable) in one or more building units; and

  (b)   is not on the customer side of the boundary of a telecommunications network; and

  (c)   is used, or for use, to supply a carriage service to the public; and

  (d)   for a line being deployed to a building lot—was installed in compliance with the conditions for such lines in an instrument under subsection 372B(4); and

  (e)   for a line being deployed to a building unit—was installed in compliance with the conditions for such lines in an instrument under subsection 372C(4).

As we proceeded to these amendments the Minister for Broadband, Communications and the Digital Economy asked why not move all the amendments together. That would have suited the minister because he wants to bundle all of the arguments against the opposition's amendments together. That was obvious in the pitch that he made to Senator Madigan in particular as he argued vehemently that all of the opposition amendments were about undoing the NBN's business case, that all of the opposition amendments were somehow about ensuring that the best parts of Australia could be cherry-picked, that all of this was purely about destroying the NBN. That is not true, and it is not true for either set of amendments.

It is particularly noteworthy that this first set of coalition amendments, amendments numbered (2) to (11) inclusive, tries to look at the best possible way to actually get the NBN built, or fibre laid, in greenfield sites. These first amendments do not touch on cherry-picking in terms of retail delivery; they do not touch in that sense on the actual retail side of operations. The first set of amendments proposes, along with a number of consequential changes, a new section 372CA that will provide for the purchase of installed optical networks by NBN Co., and would insert that in division 2. This proposed section is intended to enable developers, whose development project has an installed fibre network that is compliant, to have the option of requiring NBN Co. to purchase that network at a reasonable price. The govern­ment's system has been set up to provide for this default arrangement whereby NBN Co. operates as the provider of last resort for fibre in new greenfield developments, but it is a default version that is very encouraging, it is a default provision that is very attractive, because if developers do not go with NBN Co. as the provider of last resort they will have to pay more for the facilities to be provided to the properties they are developing. So NBN Co. will come along and, as it is doing across the country at taxpayers' expense, lay the fibre up and down the ducts and pits that have been installed in new developments, or they can, at their own expense—or of course at the expense passed onto those purchasing properties in the development—pay someone else to lay the fibre up and down the ducts and pits. This first set of opposition amendments seeks to provide a capacity for developers to use existing or new, if they wanted to start up, private competitive greenfields operators—people who install fibre in those greenfields developments—and do so in the knowledge that if they have them lay out the fibre in their communities then they can recoup the cost of that by selling on a per connection basis the service that has been laid out to NBN Co., not an unlimited sale or price but simply selling at an agreed price.

Importantly, in this construction space, it is not the retail space, it seeks to preserve some modicum of competition. The opposition heard consistently during the inquiry into this legislation concerns from many people in the business of laying fibre that the government ran the risk of putting in place a system in which developers had the choice either to pay somebody to lay fibre or wait until NBN Co. does it for free. Guess what most of us do when we are given that choice? We will take the option of getting it for free.

The result is the monopoly that NBN Co. already has over laying fibre on brownfield sites—up and down all of our streets and homes in existing developments—is extended to this greenfields space where there is an already existing market. As the minister acknowledged, people are already laying fibre up and down the streets of new housing developments at the instigation of those developers. There is a market there. This bill, if passed unamended, will change and distort that market in a way where it will become far, far more attractive for developers to simply leave it to the last resort provider, to NBN Co., to come along and do it itself.

So what have we done if we allow that to occur? There are several consequences. We have enhanced the NBN monopoly into these greenfield sites. In doing so, we have put a number of existing businesses out of the business of laying fibre because their business opportunities will have dried up. We will also create the perverse effect whereby the provision of fibre to these new developments will take longer than may otherwise occur. The developers will wait and trigger the last-resort provisions rather than take the opportunity to get the fibre installed into the ducts and pits of these new developments at the first available opportunity.

The coalition's amendments seek to ensure that developers have additional choices beyond the default option that the government has established, which over time would become the only option in many instances. When developers want to build a new development with fibre-ready facilities, they have a choice to go to the market and find complying businesses which will lay a compliant network that can be sold on to the NBN Co., hopefully at costs cheaper than the NBN Co. would be able to deliver it itself. Certainly, it would be at agreed regulated prices to ensure that there is not price gouging in this space, but hopefully to also apply some level of cost discipline upon NBN Co. by requiring it to purchase connections at reasonable prices which will be set at a price no greater than the NBN Co.'s own average cost of installing a connection. What it costs NBN Co. to install a connection is the maximum price that these private operators would be able to operate under. This would mean that if NBN Co.'s competitors can build connections at a lower charge than NBN Co. then there is a cost saving that can hopefully flow through to all.

As I indicated, there is a benefit to end users as well. The likelihood of incoming residents of new developments having active fibre services connected to their premises is increased by pursuing this approach. This approach was canvassed during the inquiry into this legislation. It was canvassed widely with a number of the witnesses who appeared. I highlighted during my contri­bution on the second reading of the bill that the Urban Development Institute of Australia, when asked about the proposed amendments that I have just moved on behalf of the opposition, said that it was a pragmatic suggestion. It said:

... that is a pragmatic suggestion. In relation to the certainty question you asked me before, that is what is confronted by developers—how and when are things actually going to be done? Whatever brings around greater certainty for purchasers of those properties that all the utilities are actually there and are available and can be handed over to them and the greater that certainty is, the better it will be.

This amendment increases the certainty that all of those utilities, all of those services, will be there. In particular, the fibre service will be there for them rather than waiting until a last-resort provision is triggered and NBN Co. eventually gets around to rolling it out up and down their street.

One of the businesses in this sector, OptiComm, when asked about the proposed amendment, told the Senate inquiry that it would provide advantages. OptiComm said:

... there would be some advantages in what you are saying to what is currently proposed. That allows diversity in the greenfield. As I have said, we have been successful. Not only do we offer broadband and voice but we offer a number of other services that some developers find attractive. It would still allow them to do that and allow them to keep that network operating through companies like ourselves or allows them the offer to transfer that ownership to NBN Co. I think that is what you are suggesting. We would never love to build a network and see it go to someone else, but I think the concept is better than where we stand today.

This is one of the existing developers going to greenfields sites, to new developments, laying out networks there and, as part of their business model, selling on a retail product, as well as having to comply with provisions which make that available elsewhere.

The amendments we are considering now do not impact on the retail side of things. They would see Opticom sell that service, that network, to NBN Co. but utilise their expertise, their skills and their capacity for competitive delivery of this fibre and utilise it in a way that will actually allow NBN Co. to hopefully access fibre laid in greenfields developments in the fastest possible way at the lowest possible cost. In relation to these greenfields developments that should surely be exactly what we all want to see.

TransACT, a large provider in the ACT of fibre to greenfields developments, equally indicated their support for this amendment and the approach it takes. They commented that a situation where different parties are responsible for installing a fibre network does not necessarily provide the best outcome. Essentially, TransACT said, 'We believe that where the developer puts pit and pipe into the development creates a situation where we have a tripartite type arrangement. You have the developer putting in pit and pipe. You have a fibre operator coming in subsequent to that. What we typically provide to the developments is a turnkey solution. We deploy the fibre and the pit and the pipe all together to the developer. We believe that having a situation where it is pip and pipe only is not necessarily the best outcome overall.'

So TransACT believe that the best outcome overall is to have the pits and the pipes built by the same person who lays the fibre and to provide a complete solution to developers in greenfields sites. It sounds like a logical approach. They indicated their support for this amendment as a good way of ensuring that you have that complete package provided. You get maximum efficiency from doing so and in this scenario the taxpayer gets maximum efficiency from doing so.

I will shortly move subsequent amendments that do go to the potential for retail service provision by these companies. The amendments look at the opportunities for these companies to maintain existing business models that see them not just build the networks but provide a retail service as well. However, those are separate amend­ments. This amendment is really to do with and focused very much on the actual building of the network. We believe that it provides good strong advantages to the operation of this bill. We believe that, rather than allowing this bill to end up having the effect of destroying many companies that currently roll out fibre in greenfields spaces, this would in fact enhance the opportunity for them to do so and, hopefully, potentially improve the outcomes for the NBN as a result of it.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I want to talk about the matters that Senator Birmingham has raised today in relation to the building of the network. I want to compliment him on this particular policy initiative of his and his desire not to see destroyed the many companies that are having some input into that.

I want to read the following quote:

I trust that the union executive will have the resolve to stare down those associated within the Labor Party who say, 'No, keep it in house. Give it to our mate, Tim Lee, who is the general manager of Fair Work Australia and a known associate of Julia Gillard, who deals with investigations into Fair Work Australia.'

That was a matter that was given today by Michael Smith on 2UE. It was an editorial—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I rise on a point of order concerning relevance. What does Fair Work Australia have to do with the fibre bill? I ask you to bring the senator to the topic at hand.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

We have a tradition of letting the debate run fairly widely in this area. We will continue and I will watch the process.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I am just reading from an editorial on Craig Thomson on Radio 2UE today. In relation to that matter—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Point of order. Reading out an editorial about Craig Thomson is not relevant even in the broadest of senses to a bill about fibre to the home deployments on greenfields sites. It could not possibly be within a stretch.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

On the point of order, Senator Conroy has not even heard the quote from the editorial. In fact, Senator Conroy did not even let a word of whatever it is Senator Ronaldson is going to quote from be uttered before he determined in his mind that it was not relevant to the debate. There is absolutely no point of order.

The TEMPORARY CHAIRMAN: Senator Ronaldson, I will let you continue and you can bring it back to make it relevant to the debate.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Thank you, and I will. But I will just repeat the comment: 'Give it to our mate, Tim Lee, who is the general manager of Fair Work Australia and a known associate of Julia Gillard, who deals with investigations in Fair Work Australia.' That was a matter raised by Michael Smith today. He said: 'I trust that the union executive will have the resolve to stare down those associated within the Labor Party who say, 'No, keep it in house.'

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Point of order concerning relevance. Can Michael Smith on 2UE talking about Fair Work Australia have anything to do with this bill. I ask you to bring the senator back to debating the bill. It will be a rarity for him to make a policy contribution in this place. Now that he is the high-powered shadow minister for tourism there was a hope that he could break his duck.

The TEMPORARY CHAIRMAN: Thank you, we are not debating the issue. Senator Ronaldson I draw your attention to the point. I have told you I will be watching what you are doing and you have repeated the same point. Can we get back to the issues around Telstra.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

The minister talked about policy contributions. I would remind him that some two months ago a very substantial policy contribution was put forward by me in this house in relation to indexation of the DFRDB. The party which voted down the DFRDB Fair Indexation Bill was the Australian Labor Party. Lots of policy contributions have been made by me and this side. But if the minister does not believe that is relevant, I will leave the matter there.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I am hoping that the minister will deign to respond to these amendments and will outline to the Senate his view on this matter. If I boil it all down very briefly, our concern and the concern of many businesses operating in this space is that, passed in its current form, the government's legislation will simply see a number of businesses go to the wall, unable to provide their type of service to developers because you are setting up NBN Co. as the default provider of fibre services in greenfield sites. The difference, you will know, Minister, is that today Telstra's default requirement is to lay copper. There is at least a value add for developers to think about by having fibre providers come in. There is a value add for the fibre providers as well because they are able to try to sell services through those developments.

Your proposal is that NBN Co. will be the fibre provider. What is the value add for a developer to get anybody else in to do it aside from it happening a little quicker? There is no value add. The value for the developer is to leave it for NBN Co. to deliver the fibre because they get it cheaper. If the minister can demonstrate that somehow they will not get it cheaper under his default provision then that would be a great illumination for the chamber. I doubt very much that he will be able to demonstrate to us that they will get it cheaper through an existing competitive greenfield operator. The government have already sent many other businesses to the wall when they have interfered in market spaces—and it is not your fault, Minister; they were not in your policy area—particularly home insulation, on which I spent a lot of time making inquiries. So many home insulation businesses happily operated effective and successful businesses in the Australian economy. They provided jobs, opportunities, good services and good workmanship to their clients but they have gone to the wall because this government's judgment is flawed on matters of policy and on how they should involve themselves in the operations of business. There is a price to pay for their errors of judgment—people lose money, people lose businesses, people lose jobs and Australia is worse off as a result.

Passed unfettered this bill will see those who lay fibre in greenfield sites lose parts of their market—potentially lose all of their market. In the process we will see a contraction of competition in that space and an enhancement of the NBN, which is already one giant monopoly. We will see a loss of private investment, of private jobs and private businesses. For years businesses have done the innovation and the hard yards, developing their own businesses model which allows them to lay fibre in a competitive way in greenfield sites. They have provided a good service to developers and purchasers alike.

The government are going to pull the rug out from under them and provide a default-free service that will ensure there is no business for the private operators and it will all fall back to you new government monopoly, your 100 per cent government own, 100 per cent debt funded and 100 per cent monopolistic enterprise, the NBN Co.

You did not subject the NBN Co. to a cost-benefit analysis. Minister, I noted in your second reading speech that you wondered why on earth I would want to see it go to the Productivity Commission. I would think they could ask better questions or to a better analysis of the NBN Co.

Senator Conroy interjecting—

I am flattered by your questions, Minister, but the difference between the minister sitting over there, the government he represents and this opposition is that we do not think all wisdom resides among us. We do not believe that we simply know best. You do. It is the minister sitting at the table who, when his $4.7 billion fibre to the node proposal fell over, when he could not manage to get tenderers to meet the requirements for each and could not manage to get that much vaunted proposal, his key policy for the 2007 election of the ground—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

A very popular one!

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

A very popular one that you couldn't even deliver! So a very popular policy that is another demonstration of the flawed judgement of your government and of the flawed policymaking of your government! You spent millions of dollars in attempting to deliver that policy, on the processes of going out to tender, and in the end it fell over. So what did you do? Well the then Prime Minister, Mr Rudd, said, 'I've got a plane trip. Come and talk to me about this disaster of the fibre to the node policy. Come and talk to me about it.' So you hopped on a plane with Mr Rudd and you pulled out an envelope like this, which somebody has helpfully left here sitting on the desk next to me, and you said, 'Well, double or nothing doesn't quite work on this. Double or nothing of $4.7 billion doesn't work. But why don't we just shift the decimal point across one? Why don't we just blow it all and put it all on fibre to the premise instead?' There was no decent study of it, there was no decent analysis of it and no clear argument as to why this was the best, most cost-effective, most efficient proposal to provide fibre broadband in the most cost-effective way to all Australians. There was no rigour and no analysis and no real scrutiny of it, and you have ducked and dodged and avoided any effective scrutiny of it ever since.

If you had such confidence in this proposal that you are putting forward, Minister, you would have accepted the opposition's call for a cost-benefit analysis a long time ago. For all of the millions of dollars that you have spent on reports, studies and getting this thing off the ground, it would have been a pittance along the way to say, 'Do you know what? I take up that challenge and I will subject it to a cost-benefit analysis. I take it up because I have confidence that the cost-benefit analysis will come down on my side of the ledger.' But you do not have that confidence, Minister, and that is why you have not taken up the challenge that the opposition has reiterated again and again to you in this regard.

Most of the significant legislation to allow you to create your $50 billion debt funded monopoly has passed through this place, but this is an important piece of legislation that deals with the niche part of the proposal. It is an important niche part, the part that relates to greenfield sites, to new developments. And, of course, because it is a niche part it has niche impacts. But to the businesses who are concerned and will be affected they are not niche impacts; they are real impacts. To the people who have invested money in building up those businesses, they are not niche impacts; they are real impacts. And you are not proposing that you are going to come along to those businesses and pay them billions of dollars, like you are to Telstra or to Optus to migrate customers across and to compensate them for the loss of their cable networks. No, you are not proposing any compensation for these businesses. You are just changing the ground rules for them; that is what you are doing. So you are changing the ground rules for these businesses and if the new business model of the NBN does not work for them it is too bad, too sad—as is the attitude of you and your government. What we will see instead is a situation where their businesses are threatened and the jobs of those businesses are threatened. Ultimately, it will be a combination of Australians, customers, consumers, people purchasing the properties in question, developers and those involved in the development industry and taxpayers who will cop the impact. The taxpayers will cop it because your stripping of competitiveness out of this sector will see prices go up and we will see the NBN Co. as a giant monopoly simply become a giant, fat, sluggish monopoly, as all monopolies ultimately do. We will see developers lose out because they will not have choice, because eventually the choice will just not be there. The developers just will not have the choice of who to go to.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

What's it like having amnesia?

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Minister, you want to talk about amnesia? Honestly! Look at the disasters that you and your entire government run away from. Day after day after day you run away from these disasters. I talked about home insulation and we can go to many other places or we can just rehash the fact that you were the one who developed a policy that you could never get off the ground and took to the 2007 election and, to get yourself out of trouble on that, you simply had to spend not just a little bit more but around $45 billion or $46 billion more, when it is all tallied up, to manage to get your new policy off the ground. That is a remarkable feat, Minister, something that I am sure future taxpayers will look back on and shake their head in wonderment at how a minister got away with such a tactical manoeuvre. I congratulate you for the tactics there, the tactics of getting a policy so wrong but being able to convince the Prime Minister of the day to go along with you on something even bigger, even grander and even less proven. It is a remarkable accomplishment in a political sense but a terrible accomplishment in a policy sense and in a budgetary sense for Australia.

As I was saying, there will be losers under this bill if it is allowed to pass. Among the losers will be the taxpayers, who will be paying more, and the developers, who will lose choice. Householders and others will also be among the losers, who will find that they are waiting around because there is not the competitive tension, the competitive dynamism, within the industry.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Would you like to come with me to the opening of the first brand-new fibre-to-the-home areas? Would you like to come?

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Order! Minister, you will have your chance.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I am not suggesting at all, Minister, that NBN Co. will not manage to build it to some people. It is a question of whether that is the best way to do it. You have this blinkered approach that NBN Co. seems to be the only way. We believe that there is a better way especially with these greenfield sites and that for these greenfield sites you can maintain a level of competitive tension in the construction approach. That is all this amendment seeks to do, but it is important because it will preserve those businesses who have gone out there and done the things that you used to highlight and praise. Minister, you used to point to some of these businesses as shining of people who were delivering the type of technology that you are encouraging everyone to embrace. Yet, with this bill you will go down as the minister who pushed those businesses out of business as a result of the freebie that you are offering everyone, ultimately, with the NBN Co.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The government does not agree with the opposition's dissenting report on the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011 and voted against the opposition's amendments in the House. The opposition is again proposing similar amendments, and the government will be voting against them again for the same reasons we outlined in the other place.

The amendments basically propose that NBN Co. participate in a scheme by which it buys back fibre infrastructure randomly installed by developers and relieves other greenfield providers of operational requirements applying to NBN Co. knowing that they offer a layer 2 bit stream service on a wholesale-only basis. That is where it goes to the undermining of the economics of NBN Co. But let me deal with a couple of points that Senator Birmingham made. He suggests that we are forcing people to use NBN Co. This is not the case. We are simply the provider of last resort—exactly the same as Telstra are today. Telstra are the provider of last resort. Obviously, telecommunications being a utility, you want to ensure that everybody gets access. So NBN Co. is replacing Telstra as the provider of last resort. The amnesia of those opposite is simply that they have forgotten that they privatised a vertically integrated monopoly. They created this monstrosity, they created this situation where Australians have been getting slower broadband and more expensive broadband than other countries around the world because they privatised their vertically integrated monopoly. Then they keep trying to pretend that a wholesale-only monopoly is a bigger, more evil monopoly than a vertically integrated retail-wholesale company that, together, discrimin­ates against every other telecommunications company in the country on the basis of favouritism for its own retail company.

You want to talk about infrastructure competition, suddenly clutching to your bosom infrastructure competition, when you privatised a vertically integrated monopoly that eradicated virtually all other infrastructure competition. Let's ask one person who might know something about infrastructure competition in this country. Let's goes to Paul O'Sullivan the chief executive of Optus, who said recently in a press conference: 'I can tell you about infrastructure competition. My company lost $5 billion at the hands of Telstra.' And what did the chief executive of Telstra say in a book he wrote a few years later about infrastructure competition when he left the country. He was an American executive—not Mr Trujillo, you may have guessed. A previous American executive wrote in his book of his time at Telstra, 'We were prepared to lose $4 billion'—this is back in the 1990s, so think back, $4 billion in the 1990s—'just to protect future revenue streams of over $20 billion that we think Telstra might make.' Telstra's chief executive fessed up. They were prepared to lose $4 billion at the time to put Optus out of business; $5 billion of losses for Optus Vision sold to SingTel for a dollar. That is what infrastructure competition, now clutched to their bosom, delivered to this country: a collapse in infrastructure competition.

Do you know how many out of the 5,000 exchanges around Australia, many of them in regional Victoria, have got a competitive deslam in them—that is the competitive mechanism you need? Five hundred out of 5,000 have got another company's infra­structure inside their exchanges after 10 years. It opened up recently, you might be surprised to know, with the threat of entry of NBN and the change in the level playing field, or the unlevel playing field. So there are a few more that have opened up recently. Five hundred out of 5,000 infrastructure competition, courtesy of those opposite. They privatise the ugly 800-pound gorilla into the marketplace with no real powers for the ACCC. Then, to fatten up the cow for the sell-off, they would not put in place any serious regulation of it at all. So those opposite who want to pretend they are interested in competition, who want to pretend they are interested in the battler, have got a track record that they would to just completely wipe from their mind.

I would urge senators not to be fooled by the silken words of Senator Birmingham, who talks down his own capacity at the expense of the Productivity Commission. As to the withering exchanges at Senate Estimates, I hope you do come along to a few of those Senator Xenophon. Occas­ionally he pops in there—I mentioned you there Senator Xenophon—and make a positive contribution. Senator Birmingham's silken tongue is always at Senator Estimates. You should come along, it's good fun.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

The minister does not need to mention me. I do not need to feel his love.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I still love you, even though no one else would be interested in talking to you. I still love you.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Sarcasm is the lowest form of wit. I agree with the minister, in what he said, that Telstra was an 800-pound gorilla. The way that Telstra was privatised did not lend itself to competition. In fact, we have a vertically integrated monopoly that internationally was acknow­ledged as being bad for competition and bad for consumers. That is why I genuinely commend the minister for the work that he did to structurally separate Telstra. The principle of it was a good one. But we do not want to replace the 800-pound gorilla with another gorilla—maybe not 800 pounds, but maybe 400 or 500 pounds in the form of NBN. That is my concern.

My question to the minister in respect of the amendment moved by Senator Birmingham is this: is it the case that under the current bill the NBN will effectively become the provider of first resort because the installation of fibre at greenfield sites will be done by NBN at no cost to the developer but there will be a cost to the taxpayer? The opposition's amendment, as I understand it, and I invite Senator Birmingham to disabuse me this if I am wrong, is that it will provide for some competitive tension in relation to the deployment of fibre at those greenfield sites. The minister knows where I stand on this. He did the right thing to structurally separate Telstra. It was a mess. It was not privatised in a way that lent itself to proper com­petition, to a lower price for consumers or to technological development that ensured we had the telecommunications system that Australians deserve. My concern is that this particular amendment might go some way to deal with what, on the face of it, appears to be a problem: that NBN will, in effect, be a provider of first resort at these greenfield sites. That is a legitimate question. The minister knows that I am not asking this from a hostile point of view but am genuinely concerned about the small businesses that could be affected by this.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Xenophon, I absolutely accept you are asking in a genuine sense. You have shown courage in backing the legislation and in rigorously pursuing the competitive angles. I am a little disappointed that you have so little faith in your own amendments, many of which were accepted and supported. You talked about being worried about the 400-pound gorilla. The 400-pound gorilla is regulated by your amendments which were robust, very pro competitive and hotly debated in this chamber. The 400-pound gorilla is regulated properly.

We have never made any apology for the prospect that we are building a wholesale-only monopoly—a fibre-to-the-home network. We are not giving it away for free. NBN Co. have to earn a return. They are not the provider of first resort; they are the provider of last resort. We need to have a provider of last resort or we will end up with hundreds of thousands of homes not connected with a phone system. So we have to have a provider of last resort. That is all we are.

NBN Co. must get a return on its investment. It is not providing anything for free. It has to get a return on its investment. That is its mandate. You have looked through many documents on this. You have discussed this at length, both here and in many other places. We are the provider of last resort which we must mandate; otherwise we will end up with hundreds of thousands of new homes without any communications infrastructure.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I am grateful to the minister for his answer. If there were an alternative which says, 'Of course, if there is a greenfield site, it needs to be ready to be connected to the NBN and needs to be fibre-deployment ready,' we need that. I do not think there is any question about that. I do not think the opposition is saying anything to the contrary. In terms of that connection to the home at greenfield sites, what is wrong with allowing there to be some competitive tension and some ability for small and medium businesses to compete for that connection? Then, in the absence of that competition, NBN Co. would provide that. So long as there are objective and rigorous standards in relation to this, why can't there be an opportunity to allow some competitive tension in that process?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The legislation does not require developers to approach NBN Co. It sets out the standards by which it has to be built. I am sure you would agree, and I think even Senator Birmingham would agree with this aspect, although one of his amendments goes deliberately against this. We have to have a system that is able to be interlinked, so we have to set the technical standard. It would be like saying to everybody, 'Just build your own railway network to all the different places.' We would have little islands with their own rail network, with different rail gauges, different rules and all those sorts of things. It would be completely different. Actually someone did that; it was called Australia. We have now connected rail to South Australia from Victoria and we now do not have to, I think, change the trains onto new tracks anymore. That is the modern day equivalent of what those opposite are seeking to do. They are seeking to change the standards by which people are building by allowing them to offer layer 3 services. That is what this amendment seeks to do.

Most importantly it comes down to cherry-picking. If you allow developers to pick and choose which ones they want, they will go where they can make the most money and they will make NBN Co. pick up the tab for all of the areas in regional and rural Australia that they do not want to build to. They will just cherry-pick the big housing estates around metropolitan areas and they will leave the rest to the taxpayer to pick up the tab. The revenue will go to them for the cheaper installations and NBN Co. will be left to pick up the tab for the more expensive installations with the poorer customers. That is where it really goes down to destroying the economics of the NBN.

Senator Birmingham can pretend that is not what he is doing, but that is exactly what he is doing. He will allow them to cherry-pick the most expensive, best, biggest areas where they can make the most money. They will ignore regional and rural Australia. We all know that no-one is interested in providing fibre to the home in regional and rural Australia. They are just interested in cherry-picking big housing estates in Sydney, Melbourne, Adelaide et cetera. That is what this amendment would allow to happen. It would fundamentally undermine the economics of NBN Co.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Minister, there is a remarkable inconsistency in what you say and in what you argue. Do you stand by the statements you have made previously? On 9 December last year you said:

It has been a consistent feature of the Government’s policy in new developments that there should be room for competing providers. This continues to be the case.

Developers will be able to source fibre from competing fibre providers if they wish. Providers can compete to provide infrastructure in new developments, for example, by offering more tailored solutions to developers or more expeditious delivery.

Do you stand by that and, if you do, isn't that somehow allowing the type of cherry-picking you are suggesting, in that it will be only the easier and cheaper ones delivered? The ones where there are better returns available will see developers and providers go in and provide the fibre services in those greenfield sites. Isn't that just what you were railing against? Yet that is what you said would be the case and is what in other places you and the department have indicated is what this legislation provides for.

In addition to responding on whether you still think there should be room for competing providers, which is all the opposition is attempting to facilitate through these amendments, can you make it equally clear—and I will put this as simply as possible—whether it will be cheaper for developers to use the provider of last resort that is NBN Co. to get fibre laid than it will be for them to use anybody else? Will it be cheaper for them to do that than to go to anybody else? It is a simple question and would demonstrate whether your belief that there will still be some competing market and some room for other providers is the case, or whether, as we and many others contend, you are setting up a system where the provider of last resort becomes the default provider because it is going to be significantly cheaper for developers to use it and it alone.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Birmingham likes to quote selectively. The capacity for someone to compete with NBN Co. in fibre is there now. NBN Co. itself conducted a tender. For people who have not followed this debate it actually had a tender. It had reached the view that it needed to go with one national supplier because of capacity issues. So NBN held a tender because NBN itself does not have the capacity to do these installations. It tendered, and Fujitsu got the contract.

On your specific question, I have no idea what the business models and pricing of all the other companies are. I am not in a position to answer your question, because I do not know what the business models and offers from those other companies are.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I will put it a different way then. What will NBN Co. charge as the provider of last resort?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I think the final agreement is pretty much the same as that which Telstra used to charge for installation. Telstra did not charge developers anything to install—it is what still happens today. Telstra does not charge anything to provide the copper into the home. It makes its money from the usage of the product. It may not be exactly the same—I have not seen all the final documents on this because there is still lengthy discussion and negotiation—but Telstra itself used to provide all of the connections. The developers would open up their pits and Telstra would run the copper in and connect the phones. I am happy to provide to you any further information that may be available.

Developers can source fibre from competing fibre providers if they want. Other providers can compete to provide infra­structure in new developments—for example, by offering bespoke solutions to developers or more expeditious delivery. NBN Co.'s role in new developments reflects its role in rolling out the NBN nationally. Where NBN Co. provides fibre it will recover the cost on a national basis and over a longer time horizon, just as Telstra has done historically with its copper network. It is up to other providers as to how they charge and recover their costs. If alternative providers want to compete with NBN Co. they are welcome to do so, but it is on the understanding that they have the resources and capacity to do so.

I am not sure there is much I am going to be able to add to that, no matter how many times or ways you rephrase the question, Senator Birmingham.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Grudgingly, the minister found a way to at least sort of answer the question. He said that NBN Co. would provide and lay the fibre, but would recover the costs on a national basis over a longer time horizon. Private providers providing the services would not be able to do that; they would have to recover their costs by charging the developer, which of course would be put into the costs of the land that is sold.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

What's the cost? Come on!

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Minister, you said the very nice words that you could not talk about the business models of—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I'm not talking about business model, I'm saying: what is the actual cost of opening up pits and pipes? Come on, you've got to know that—you're an expert on this.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Minister, you are not going to catch me on that, because, while you have tried to proclaim me as an expert on things, I made the point very clearly before that I do not propose or pretend that we are experts on everything. I can, if you want. I can quote some of the evidence received by the Joint Standing Committee on the National Broadband Network about the costs of developing these things, of installing the fibre and so on, if you want. We can go through the submission of Greenfield Fibre Operators of Australia, which stated that:

NBN Co Agreements with Developers, who have already applied for 133,000 new lot connections in Greenfield developments since 1 January 2011, evidences that the cost of each connection is currently averaging over $3000 per lot (excluding any back haul construction costs).

Current prices for GFOA networks that equal or exceed the current functional performance of NBN Co networks are up to $1500 per lot (excluding any back haul construction costs). FTA TV and Pay TV may add $300 per lot.

That was from the submission made by GFOA to the committee's inquiry into this legislation. If you want to talk about costs, TransACT said, according to the committee's dissenting report, that:

… the approximate cost depending on choice of provider and specification used, of installation of a fibre network per premise is up to $3500. TransACT stated:

The ballpark type numbers indicate that pit and pipe is somewhere in the order of $500 to $1,000 a premise and a turnkey solution is anywhere up to $3,500 a premise depending on who deploys it and what the specification is.

They are fairly valid points, but none of them get away from the reality of what you have just said and made quite clear to the chamber in this debate—that is, that the first of two models that will be available to developers is that they can use a private provider to have fibre laid. Of course, that private provider, as a private business provider, is going to have to recoup its costs somehow. The only place it can recoup them under your model is to charge the developer, which costs the developer more. Or, the provider can let NBN Co. do it and recoup the costs 'on a national basis', to use your words, over a longer time horizon, charging the developer nothing.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

What did Telstra charge the developer?

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Minister, I cannot believe that you, of all people, who love to come in here and give these lectures to everybody else, want to try to draw this comparison between Telstra laying a copper wire and developers getting a private business provider to lay fibre. I cannot believe you want to draw that comparison. This is a changed dynamic. This is a different approach that you are pushing through, and that is your right. But you are now talking about a situation whereby it is not Telstra laying copper against a private provider laying fibre. It is not Telstra offering copper for free against a private provider offering fibre at a cost. It is NBN Co. offering fibre for free against a private provider offering fibre at a cost. It is the same product, but one person—your govern­ment owned monopoly—is offering it for free. This is a fairly emphatic difference. You cannot keep drawing this comparison, making this argument that it is the same as with Telstra, because we are looking at a different situation here.

We are looking at businesses that have evolved over a period of time, businesses that have filled a space in the market that was not being filled. By changing the ground rules, as you are doing, you are going to transparently disadvantage those businesses. Your notion of provider of last resort is very clearly a flawed notion. You are very clearly setting up a situation whereby NBN Co. becomes the default provider. It will become the default provider because it will be hundreds if not thousands of dollars cheaper to use it. Per premise, developers will save hundreds or thousands of dollars to go with NBN Co. instead.

For most developers operating in a market where margins are tight, particularly right now, there is not a lot out there at present—not a lot of money to be made on residential or other property developments. Every dollar they can get counts. Every dollar on the margin is important. They are going to take the cheapest option. I cannot believe that you will not recognise and accept that. You see this concern of the opposition's as illegitimate and reject out of hand this sensible amendment of the opposition's that seeks to simply preserve the right, the role and the capacity of these private providers to keep doing the business they are currently doing: laying fibre in greenfields develop­ments and ensuring that in those greenfields developments there is competitive tension, as Senator Xenophon acknowledged, between the potential providers of fibre to those developments. It baffles me that you reject that.

But I am pleased that at least you have acknowledged, even if you will not put it in these words, that there will be a very distinct cost differential. People can go with the private provider and pay, or they can go with NBN Co. and not have to pay. That is the situation that will confront developers. In the overwhelming majority of cases one would expect that anybody who is given what is a fairly rational economic choice—do you pay for something or do you get it for free?—will go with 'get it for free' on almost any day of the week.

That is what will happen. You cannot continue to mount this argument that what is happening with these fibre providers is somehow comparable to where we are at with Telstra and copper. I am not aware that anybody is out there providing competition in the marketplace over who is laying copper in the ground. I am aware that there are plenty of businesses providing competition over who is laying fibre in the ground, and I am aware that those businesses fear this legislation and fear what it will do to their future.

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

I rise to add some brief comments to those I made during the second reading debate on this bill, the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011. I do not think these amend­ments—opposition amendments (2) to (11)—are illegitimate. Unlike with many of the amendments and proposals the coalition have served up during the course of this debate, I do not think this is an attempt at wanton sabotage. At least that is a relief; maybe we have moved on from that stage. I think the coalition, and all of us, are grappling with the fact that it is actually very difficult to compete in an open market with a utility provider that will be leveraging gigantic economies of scale.

The issue I touched on in the second reading debate—and I will address some of these questions to Senator Birmingham—is the issue of exactly how these amendments will work. I am speaking in particular about clause 11, which I have had a bit of time to think about as I have been listening to the debate. My main questions are how it will work in terms of pricing if NBN Co. is being forced to purchase an asset that has been put into the ground by a third party as well as the question of standards. I do think this is a valiant attempt to grapple with the very difficult issue of what happens when private fibre providers, who have been quite happily going about their business in cities like Canberra and in other places around the country and putting in the infrastructure, suddenly find that a national monopoly utility rolls over the horizon, with enormous economies of scale. It is going to be very difficult to compete. That is why I have some sympathy for these amendments. However, the problem I have is that it appears to me that the amendments would simply make things worse—although I note that some of the providers have offered conditional support to what the member for Wentworth and Senator Birmingham are attempting to do. My first question to Senator Birmingham goes to the heart of the promotion of competition. Perhaps the outcome would be cheaper, more efficient and of a higher technical standard if we just let the larger providers do their work. Competition may not in fact be appropriate. My question is about amendment (11) and subclauses 372CA(8)(a) and (b). The way that this amendment will operate in practice is that a third-party provider will put a network into the ground and then NBN Co. is going to be forced to buy it. How are the parties going to come to an agreement over price? Perhaps Senator Birmingham would care to address that issue and maybe flesh out a little bit how these changes, particularly proposed sub­clauses (6) through (8), would function in practice. I do not understand how you could negotiate a contract and fair terms of a transaction under the kinds of clauses that the coalition have drafted here.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I rise—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

My favourite fibre-to-the-home-supporting National!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I thought that might wake you up, Minister! I rise to ask a question of the minister. I have not been closely involved in the debate over this for a while now, but I could not help but come and join my colleague Senator Birmingham down here this evening. Telecommunications certainly has been an interest of mine for a very, very long time—since long before I came into this place, as the minister would well know. What I find extraordinary is that we are still here, after years and years of this inept government, talking about NBN in various forms—first we had to fibre to the node and then we had fibre to the home. This whole process is extraordinarily inept.

The minister started with a certain principle that he had in mind that he wanted to deliver, and some aspects of that I have a small amount of sympathy with. But unfortunately what has happened is that it has morphed into this unwieldy beast that the minister may well have lost control of. When you look at the intent, years ago, of how this was supposed to work and how it was supposed to look, it really seems to have gone off the rails in a lot of ways. I do have a question, Minister. I will get to that in a moment and it relates to these amendments, but I want to take the opportunity to make a contribution about regional communities.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I recommend you visit Armidale!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

What actually got me interested to come down here was having recently been up in the seat of Lyne—and the whole issue of greenfields was raised with me very recently. Isn't it extraordinary that we see from this minister a complete mess and, not only that, attached to it a gigantic bucket of money? We will get, at another time in this place, to the discussion about the gigantic bucket of money, because, quite extraordinarily, it is just that—it is just a bucket of money. As far as we can see, there is absolutely no indication at all of any thought, rhyme or reason that has gone into the funding allocation for this—it is just a bucket of money. I am not sure that that is an entirely appropriate way to run the government's coffers. That is probably the greatest understatement I could use in this place.

I know that colleagues will understand completely when I say that the government's ability to manage the economy and to manage money is absolutely deplorable. We only have to look at the $198 billion of debt that the government has managed to rack up to ask: does the government even have the ability to deliver the NBN in any way, shape, form or capacity so that it looks like some kind of functional network? I am not sure that it does. While we seem to be inching ever closer to something—and I use 'inching' in the loosest sense, because it is probably a lot less than inching—we seem to be getting to an end point of this giant bucket of money being spent on something that may well be superseded by something else very, very quickly. I am not sure that that makes sense either—that we are going down the road of spending tens of billions of dollars from a gigantically big bucket of money for something that may well be superseded in the very near future.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Oh, please, don't you do that! You know better than that!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Call me a cynic. Call me a sceptic. I actually think that maybe that is not the best way forward. I will take that interjection from Senator Conroy saying that I know better than that. The minister is well aware of my involvement in this before I came to the Senate. Certainly at that time there were some views that were held by those of us who were looking into telco in the bush—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You wrote 'fibre to the home'. I stole your plan!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Absolutely. Oh, you did steal my plan, did you? Thank you, Minister. Interestingly, I have the capacity to actually move with the times and embrace new things and new technologies—not be a dinosaur stuck in the past but be prepared to move forward with the times. I have come to the point where I am not entirely assured that picking one technology is the way to go.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Oh, that's sad. You're about to become a luddite!

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

You may not like to hear this, Minister. You may not like to hear this at all, but I genuinely believe that. While we are on that subject, the thing that is so sad about this whole NBN process—and it is really sad—is that regional Australia has missed out. We still have no improvement, apart from in a couple of tiny pockets. Minister, you might be able to enlighten me in your answer about how many people in Armidale have now switched onto the NBN. I could be wrong—I could be underestimating things and doing you a great disservice—but I think it might be 15 people in Armidale who are now connected to the NBN. I shall look forward to your updating that and letting me know if I am indeed incorrect. I may well be. It may be more than 15 people out of a population of—I am not sure about Armidale; maybe it is 20,000 or 30,000. Minister, I am sure that you, having done the work up in the area, will be able to inform the chamber of exactly how many tens of thousands of people there are in Armidale, a place where I think 15 people have connected to the NBN. I am sure you will be able to enlighten me on that. Just to reiterate my earlier remarks, what I find really sad is that regional Australia has been left behind again. All we are getting from this government is talk, rhetoric and a whole lot of never-never. As I said, I give the minister credit for the little tiny pockets where the NBN has been connected. But, by and large, we are absolutely missing out. I say this in the context of the fact that if we had been in government the improvements to regional Australia would have been delivered.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Don't say OPEL.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Minister, I am quite sure you would not like to direct me on what to say. It is funny but, under that, regional Australia would have had an improvement. Under the Labor government, regional Australia has not had an improvement. I am not a rocket scientist and perhaps I am a bit of a sceptic but, when I look at the whole scenario, I think, 'Under a coalition government regional Australia would be getting better telecommunications and currently under the Labor government regional Australia is not getting better telecommunications.' It seems like a bit of a no-brainer to me. Despite all this talk and all of this rhetoric about regional Australia getting better services and better telecommunications from this NBN, there is virtually nothing there yet—and it has been years and years.

I am sure the minister will stand up and say, 'Oh, yes, but we are progressing and it is all going to this end point.' I can guarantee the chamber that the minister will take the opportunity to have a very eloquent spray at me personally, given my history with telecommunications.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I used to have too much respect for you to do that.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Oh, Minister, that is too kind! I am sure it will arrive and I am quite happy to sit here and listen to it if it does because what I do as a senator for New South Wales on the coalition side of this chamber is try to embark on and be involved in things that are actually going to improve things in regional communities. That is what I do. That is what I stand for. That is why I am here. That is why many of my regional colleagues are here, from the National Party to my Liberal regional colleagues. We try to improve things in regional Australian communities. What we have from this NBN is no improvement for regional communities. Maybe one day in 30 years I will stand here and eat my words and there will be this brand new nirvana of telecommunications having been delivered to the regions that at that point has not been superseded by another technology. Maybe I will, but I very much doubt it. I very much doubt it because it simply does not make sense.

While we are talking about regional Australia, something that is very interesting is the Australian Broadband Guarantee, which finished on 30 June. Whilst it is not necessarily related to this amendment, I will place on notice that I will have a discussion at some stage with the minister about the arrangements now that the ABG is finished and how that is all working, because it is as clear as mud. I will be having a discussion with the minister about how that works now and what a family moving out into a remote area that wants to hook up to satellite now has to cough up. It is not entirely clear. That is a discussion we will be having.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I suggest you seek a briefing before you do that.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Thank you, Minister. I will take up the offer of a briefing. I appreciate that very much because I do not have your obvious expertise in this area and I would very much like to know exactly how that is rolling out.

It is interesting, too, when you look at the delivery under the NBN that is going to happen out in those regions. Is there a structural separation now? I would suspect there is not out in those remote areas. Perhaps, Minister, if you would be so kind, we could include that in the briefing. Maybe I could ask of officials at a briefing exactly how that works, because it looks very much to me like a structural separation has not happened out in the more remote areas. As I said, I have not been very involved in this lately and I could be completely wrong, but wouldn't it be an absolute shame if, through all of this reinvention and this wonderful NBN, remote areas ended up exactly where they were to start with? I do not know if that is the case, so I do appreciate the minister's offer of a briefing, but it occurs to me that that would be a very bad place to end up if, indeed, that is the case. It may well not be.

The reason we have this amendment is to try to create some sensibility in this whole process. I appreciate the answers the minister gave Senator Birmingham before. The area I am interested in is the NBN as a provider of last resort. When we are looking at this construction, as I understand it, where it is not going to be taken up by private companies the NBN is the provider of last resort. That actually looks a little bit similar to the old AWB provider of last resort before we deregulated the wheat industry, which was an extremely good measure that we no longer have, much to my sadness and that of my Nationals colleagues and many, many wheat growers out there across the country. My question is on the issue of the NBN as the provider of last resort. I am genuinely interested in: what triggers that, and what is the time frame from the trigger to when the NBN provides that?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I would probably need some information that is not available in the chamber, but I am happy to provide that information for you, Senator Nash.

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

I might just draw the attention of the chamber back to one or two of the questions that I put to Senator Birmingham. I have missed Senator Nash's contributions in these debates. Her contributions on tech matters were generally much more sensible and well researched than those of some of her colleagues, with the honourable exception of Senator Birmingham. I think there is a very important reason why NBN Co. has such a small customer base, and that is primarily that the network does not yet exist. That, I think, is what is suppressing its customer base at the moment. We are about to go into a volume rollout phase, and I do not think you will have to wait 30 years to come back in here—not necessarily to retract—but I do not think anything is coming down the pipeline any time soon that will match the kinds of speeds that will be provided when we can send this sort of bandwidth directly to people's premises. I think there is a very important role for this chamber and its various committees in accountability, in watchdogging this project and making sure that it does not go off the rails. But I also think that the main argument in essence has been won and we now need to just get on with the build.

The question that I put to Senator Birmingham before goes specifically to some of the amendments that he has proposed, particularly amendment (11), about exactly how commercial negotiations are supposed to take place when NBN Co. is effectively being compelled to acquire an asset from a third party.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

One of the things I really like about Senator Ludlam is that, compared to some of his colleagues in the Greens, he is an optimist. When I hear contributions from some of his colleagues in the Greens, especially in some of the climate change and environment debates that I also have carriage of in this place, I find myself leaving rather depressed, concerned that the world is going to come to an end, possibly as early as tomorrow morning.

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

My glass is half full!

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Senator Ludlam has a glass-half-full approach to things and his optimism about the take-up rate and about how wonderful the NBN is going to be is an admirable thing. We have an argument that it might be misplaced optimism, but I respect the fact that Senator Ludlam brings that optimism into this place. I want to turn to his questions, but before I do—otherwise I will forget—I do find it remarkable that the minister could offer no answer to Senator Nash's questions at the end of her contribution—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Just a timing question.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Yes, in particular her question of timing about when the provider of last resort trigger is triggered. When actually is it the case that a determination occurs that on this greenfields site fibre has not been laid and rolled out and so it is now up to NBN Co. to assume responsibility? There is a separate question which Senator Nash also asked which went to how long it will take NBN Co. to fulfil that responsibility. That may require separate advice, Minister, but I would have thought and hoped that you would be able to answer both of those questions during the conduct of this debate, because I think that is perfectly sensible and reasonable.

Senator Ludlam asked questions earlier and then repeated some of them about pricing and standards in relation to the amendments that the opposition are proposing. If I can tackle those—and he is right—this amendment sets up a situation where NBN Co. can be compelled to purchase the network off the developer. It is not a case of NBN Co. negotiating each individual purchase with each individual developer on those individual terms. It is in fact that, as proposed section 372CA(6) states:

The amount of the purchase payment must be in accordance with a scale of payments determined by the Minister for this subsection and published in the Gazette.

It then goes on in parts (7) and (8) in particular to outline how the minister determines the scale of payments. Part (8)(a) indicates that the minister must consider 'the typical costs of providing such networks or elements of such networks, including significant regional variations in costs'. That is an important point given the minister's allegations that this would enable cherry-picking of the cheapest places in which to do business. In fact, the minister would have in his power and at his discretion the capacity to indicate that, yes, it is more expensive to lay the fibre in some locations than in other locations. Part 8(b) states that the minister would take into account 'the costs that NBN Co. would have incurred had it undertaken to provide such networks itself', which again of course would provide for regional variations and the like, but they are of course explicitly provided for in part (a).

The really obvious area of competitive tension or opportunity here is that you would hope that the more this work occurs the more it is keeping NBN Co. and providers honest in terms of laying out the fibre in these developments. But of course the best argument here is that it ensures you get the best result for the developer. The developer and the people who purchase premises within the development get their fibre; they get it as fast as the developer can find somebody who can lay it and who can do so on terms that they find profitable enough to operate on according to the scale of payments that the minister has scheduled.

With this whole NBN construct we are in a world of regulated payments. I know that Senator Ludlam appreciates that. In terms of access to the network, payments are regulated. This is providing for an element of regulated payments at the construction point and the construction end. With regard to the standards that would be set—and I think this is an important point to make—we are attempting through these amendments to provide a greater level of independence from NBN Co. of what those standards are. We are attempting to ensure that there is some level of independence, and our amendments (5) and (9) identify the ACMA as having a role in setting the standards and doing so in consultation with relevant industry bodies and—yes, absolutely—at a standard that is compliant with what NBN Co. needs. But, by having the ACMA play a role, what we hope to get away from is where NBN Co. demand a gold-plated system, where NBN Co. set any unreasonable level of standards for how it is done. Obviously, what we want are speeds that are required for the network. What we would expect are the standards to be correct. However, the minister seems to be quite happy to have a situation where NBN Co. can require such standards in these developments that would just render it utterly unprofitable for anybody else to provide the services, with not the slightest independent check on what it is that they demand or what it is that they want. We do not think that is reasonable. We think that, if you are going to have standards, obviously they need to meet the requirements and specifications of what NBN Co. need, but there needs to be—

Senator Conroy interjecting—

Minister, either you can snipe away in the corner there or, occasionally, you could actually provide a constructive contribution. I have heard you speak in the committee stage to date and, more often than not, it has been to rehash the history of Telstra as a vertically integrated monopoly, to rehash the coalition's policy position—to rehash everything. It has never been to argue the case for the bill that you have presented before this chamber. If you want to get into some detail and start arguing the case for your bill, then feel free to do so. But all you want to do is snipe from the bench over there, without providing any arguments or details of your own or anything substantive to refute the concerns. These are not just concerns the opposition has made up. Mr Turnbull and I did not just sit down in a corner, and say, 'Geez, I wonder how we can invent some concern here.' Senator Ludlam and Senator Xenophon, as well as the other members of the committee, heard evidence from concerned businesses. That evidence is reflected in the Senate committee inquiry and it is evidence that we have tried to act upon by developing these amendments.

So to return to Senator Ludlam's question, we believe the approach we have laid out ensures there will be standards that meet the specifications that NBN Co. needs. They will be standards, however, with a level and a modicum of independent oversight that the ACMA will provide and they will be standards that are developed with industry consultation.

We believe the pricing can be set in a way that avoids the type of cherry-picking fears that the minister has been trying to create and that provides some level of certainty for businesses going in and that, most import­antly, provides developers and households with the opportunity to ensure they can get the fibre laid in a timely manner.

I will finish by, again, reminding the minister of Senator Nash's question about timeliness. Minister, perhaps it would really help this debate if you could actually tell us how long we would have to have no fibre laid in the pits and ducts before NBN Co. considered it was their responsibility to do so and, once they acknowledged that respon­sibility, how long it will take them to do so. Why don't you try answering those two questions?

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

While the minister collects his thoughts, I thank Senator Birmingham for his careful answer to my question. I do not propose to dwell here, but I want Senator Birmingham and the coalition to understand that I have not dismissed this amendment lightly. I genuinely do not think it will work and I do not understand how commercial negotiations can take place, if you can call them negotiations under the terms set out here.

In your proposed section 372CA(8)(b), you propose that, in drawing up this scale of payments, the minister should 'take into account the costs the NBN Co. would have incurred had it undertaken to provide such networks itself'. You have also been at pains to point out that, by definition, NBN Co. would have incurred much lower costs if it was providing such networks itself. It will be leveraging gigantic economies of scale, which is why this competition argument is such a vexed one. How is the minister meant to take that into account? And what happens in the event of a dispute, where the NBN Co. and a third party provider disagree on the price that the minister has set? I think this is a recipe for enormous disputation and I do not understand how it would work in practice.

Progress reported.