James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I table the explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

TELECOMMUNICATIONS LEGISLATION AMENDMENT (COMPETITION AND CONSUMER) BILL 2018

SECOND READING SPEECH

The Telecommunications Legislation Amendment (Competition and Consumer) Bill 2018, which I am introducing today, will, together with the Telecommunications (Regional Broadband Scheme) Charge Bill 2018, improve the provision of superfast broadband in Australia.

The Bill implements key measures of the Government's response to the Independent Cost-Benefit Analysis and Review of Regulation carried out by a panel of experts chaired by Dr Michael Vertigan AC. It will improve the supply of superfast broadband by:

Improving carrier separation rules

In 2011, the former Government introduced carrier separation rules to require new superfast broadband networks, other than the National Broadband Network, that service residential and small business customers to supply a basic wholesale service on a non-discriminatory basis and be wholesale-only (that is, structurally separated).

This Bill reforms these rules to bolster competition at both the wholesale and retail level while also resetting the default wholesale-only requirements to make them more effective.

The key changes to the rules are these.

First, the Bill removes the rules from networks servicing small businesses. This creates greater flexibility for carriers to supply superfast broadband to small businesses, enabling small business to benefit from greater competition in this market.

Second, carriers other than NBN Co and Telstra will be able to operate both network and retail businesses on a functionally separated (that is, at arm's length) basis subject to the approval of the Australian Competition and Consumer Commission, the ACCC. Networks operating on a functionally separated basis will need to meet core requirements. These include the operation of separate wholesale and retail business units, with separate workers, accounts and IT systems, as well as the non-discriminatory provision of services and the protection of customer information.

This approach will enable carriers to harness the efficiency benefits of integrated operations while allowing other providers to share those benefits through non-discriminatory access to networks.

Third, the Bill allows the ACCC to exempt small start-up networks from the separation rules to encourage entry into the market and the growth of new providers.

Fourth, all services supplied on networks that are wholesale-only or functionally separated will be subject to clear non-discrimination obligations.

Finally, the Bill improves the enforcement regime to make it more effective. This includes giving the ACCC a wider range of enforcement tools and allowing for private enforcement.

Statutory Infrastructure provider (SIP) regime

The current Statement of Expectations issued to NBN Co requires it to roll out the National Broadband Network. However, there is no statutory obligation requiring NBN Co to connect any premises to its network and service them on an ongoing basis.

This Bill addresses this by establishing a statutory infrastructure provider, or SIP, regime so that all premises in Australia can have access to superfast broadband. This will provide certainty and clarity for all parties: NBN Co, its customers and, most importantly, consumers.

Under the arrangements, NBN Co will become the SIP for areas as it rolls out its network and will be the default SIP for all of Australia once it has completed the National Broadband Network. This is appropriate given that NBN Co will ultimately replace Telstra as the principal fixed-line operator in Australia. Other carriers will also be able to be SIPs where appropriate.

The Productivity Commission, in its report on its review of the universal service obligation (USO), saw the SIP regime as a key part of its recommended approach to the USO and recommended it be implemented as a priority.

The Bill methodically sets out how to identify the SIP, the obligations of the SIP, and the processes to be followed when a SIP does not or cannot meet the SIP obligation. There will be a central register of SIPs so industry and consumers can find out who the SIP in an area is.

In doing this, the Government is putting the customer experience front and centre in this legislative package.

SIPs must connect premises on reasonable request from a retail provider and supply wholesale services that support a peak download speed of at least 25 megabits per second and a peak upload speed of at least 5 megabits per second. This is consistent with the speeds set out in NBN Co's Statement of Expectations. SIPs must also supply wholesale services that retail providers can use to support voice calls on fixed-line and fixed wireless networks.

The Bill provides two clear targets that NBN Co, as a SIP, must take all reasonable endeavours to meet.

These targets again reflect the current NBN Co Statement of Expectations and the Government's commitment that people in Australia have ready, affordable access to superfast broadband into the future.

Consumers will for the first time have clear information on why any request for a connection has been refused and by whom, assisting them in seeking redress.

The Bill also gives the Minister for Communications reserve powers to set standards, rules and benchmarks that SIPs must comply with (or in the case of benchmarks, meet or exceed). These could include timeframes for connecting premises and rectifying faults, rules about how premises are to be connected and how complaints must be addressed.

The Minister will also be able to make service provider rules dealing with consumer issues like the handballing of disputes between wholesale and retail providers if required.

By providing certainty that premises can be connected to superfast networks and consumers at those premises can receive superfast broadband, the SIP arrangements provide a solid core around which a new forward-looking consumer protection architecture for the future NBN environment can be developed and implemented.

Regional Broadband Scheme (RBS)

The Bill, together with the Telecommunications (Regional Broadband Scheme) Charge Bill 2018, establishes the Regional Broadband Scheme to provide sustainable funding for the provision of superfast broadband services to regional, rural and remote Australians.

Providing quality broadband services to regional Australia is a major challenge, and a very expensive one. Modelling by the Bureau of Communications and the Arts Research has estimated NBN Co's fixed wireless and satellite networks are expected to lose around $9.8 billion over 30 years. Currently these losses are funded entirely from an opaque internal cross-subsidy from NBN Co's profitable fixed line networks. The Regional Broadband Scheme makes this cross-subsidy transparent and requires all fixed line broadband carriers to contribute equitably to the cost of providing regional broadband services.

Under the Regional Broadband Scheme all carriers would contribute around $7.10 per month per premises where a broadband service is provided over their fixed line networks. It is intended that the charge would apply to all premises serviced by fibre to the premises (FTTP), fibre to the node (FTTN), fibre to the basement (FTTB), fibre to the curb (FTTC) and hybrid-fibre coaxial (HFC) networks.

Once the NBN rollout is complete, it is expected that NBN Co will have around 95 per cent of the fixed line market, which means it will continue funding the bulk of the cost for providing broadband to regional Australia. Customers on NBN Co's networks will not experience price rises as the charge is already imbedded in NBN Co's pricing. For the remaining carriers, it will be up to these networks to decide whether some or all of the charge is passed on. The Bills also include a concession period for smaller carriers that exempts the first 25,000 residential and small business premises for five years.

The Government is well aware that broadband technology is constantly evolving and new technologies may emerge at any time. The Government is committed to reviewing the Regional Broadband Scheme on a regular basis to ensure the funding base remains appropriate. The Bill includes a requirement to conduct a review within four years of the Scheme commencing.

Once established the Regional Broadband Scheme will provide certainty for regional Australians that their essential broadband services will be maintained and upgraded into the future.

Conclusion

The Bill makes important changes to the broadband regulatory framework to strengthen the provision of superfast broadband infrastructure across metropolitan, regional, rural and remote Australia. The changes put the customer experience front and centre by ensuring consumers can benefit from greater wholesale and retail competition, access superfast broadband under the statutory infrastructure provider obligation and are supported by sustainable funding arrangements for essential broadband services in regional, rural and remote Australia.

I commend the Bill.

Debate adjourned.