National Braodband Network Companies Bill

The amendment in relation to the requirement that the supply of eligible services must be on a  wholesale basis was moved in recognition of the fact that the legislation put forward by this government does not give adequate effect to its own commitment that NBN Co. would operate on wholesale-only basis.

This is a very complex issue, but it is also an issue of the first importance in the policy bargain that is being put forward by this government. It is not, I might say, a policy bargain we agree with. But, in their own terms, the bargain that they have put is this: that competition will be restricted, indeed effectively barred, in facilities based competition by any network wishing to operate in competition with the NBN Co. In exchange for that unprecedented restriction on competition, the assurance that has been given by this government in policy terms is that NBN Co., this enormously powerful entity, will only operate as a wholesaler.

The implementation study notes the importance of this issue. I quote from page 28: Defining wholesale-only is simple in theory but complex in practice. Later on the same page, in discussing the possibility of a bank or another large corporate effectively being directly sold services by the NBN, the implementation study notes: The risk is that relaxing the wholesale definition in this or other similar ways could provide an opportunity for NBN Co to expand its scope beyond what was originally intended by Government.

This is a very sage warning provided by the authors of the implementation study, who received $25 million from this government for the provision of that advice. The point they highlight is that the regulatory scheme this government has put forward, if it is to be delivered upon, depends upon the most rigorous restrictions on the capacity of NBN Co. to sell in only the wholesale market. If there is any doubt that NBN Co. also has the capacity to compete in the retail market then what this government is putting forward is a very bad bargain indeed. It is because of our fear that a very bad bargain is being put forward that we have moved these amendments.

Our fear as to the scope creep or the mission creep that NBN Co. is likely to engage in was enhanced when we saw the broad range of utilities which NBN Co. is to be permitted to sell to directly. These include transport authorities, electricity supply bodies, gas supply bodies, water supply bodies, sewer service bodies, stormwater drainage service bodies and state and territory road authorities. I cannot understand why the government did not include the Dust Diseases Tribunal and many other bodies, because it is very hard to draw any intellectually coherent basis for the range of categories of organisations which are to be permitted to be sold services directly and in clear violation of the stated policy principle which this government articulated when it first announced its policy on the National Broadband Network.

If this government is genuine about delivering on its policy commitments, we do not think it is sufficient to rely upon the mechanism contained in the bill as it was put to this House. The mechanism is a restriction on selling to anybody who is not a carrier or a carriage service provider. We say that mechanism may have been appropriate under the 1997 legislation but it is not appropriate now, when it is being pursued in the context of dramatic restrictions on competition barriers to any player wanting to come into the market to compete with the NBN Company.

This is the vital new element, which is why it is not sufficient to rely upon the restriction that NBN Co. is only permitted to sell to a carrier or a carriage service provider. Additional safeguards are required if this government’s policy commitments are to be delivered on. That is why we have moved the amendments.

The question has been put as to the rationale for moving this amendment, and the question has been asked by the member for Lyne and the member for New England, amongst others, and I think, by implication, by the member for Kennedy. All of them are longstanding and passionate advocates for improved rural communications.

I well remember meeting and being struck by the forceful personality of the member for

Kennedy when I was a recently arrived staffer for the then Minister for Communications,

Senator Alston. The member for Kennedy spoke passionately about the need to improve communications in the little town of Julia Creek, in his electorate. He has been a very long-time advocate for improved rural communications, as have the other two independent members who have already spoken in this debate.

All fair-minded Australians want to see a dramatic improvement in communications delivered to rural and remote Australia, and that has been one of the pressing issues in telecommunications policy in Australia for the last 15 years. When I first started working in this field we received representations from farmers who were concerned about the fact that their dial-up internet speed was 1.2 kilobits per second. That was in 1996 and 1997, so while we may sometimes forget how far we have come, we have come an enormously long way.

But there is no dispute on this side of the chamber that we have further distance. And we are very strong supporters of improving Australia’s broadband infrastructure, including in rural and remote Australia. That is why, in the policy we took to the 2010 election, we committed over $6 billion of public spending—by any measure a very large amount of money. And the vast bulk of that was for rural and remote Australia. Over $1 billion was for a wireless network using, I might say, the same spectrum and the same technology as the Labor Party is proposing to use for the wireless component of the National Broadband Network.

I venture to suggest that when it comes to the services that will be delivered in Julia Creek there is no difference between what the Labor Party is proposing and what we are proposing. There is no contention about the need to improve broadband in rural and remote Australia. That brings me to the question of what is behind our thinking in putting forward this amendment. We are simply seeking to have the government deliver on the commitments it has made, because a specific commitment made by the government to underpin this policy architecture is that there will be uniform wholesale pricing across Australia. That is—let us be clear—a very difficult thing to achieve. The brutal economics of telecommunications mean that it is vastly more expensive to deliver services in rural Australia than in metropolitan Australia.

There is simply no way around that fact. That has been a central element of, and a central challenge for, telecommunications policy in Australia for many years.

When we look at a sweeping promise made by the Labor government which we know is very difficult to achieve given the fundamental realities of telecommunications economics, and when we know that this is the promise that has been made to independent members in this place and, through them, to rural and remote Australia, we say to ourselves that we are somewhat suspicious that that commitment is contained in the legislation only in respect of the services which are delivered over the present generation of wireless and satellite. We ask ourselves: is this because the NBN Co. is trying to find ways to claw back some of the difficulties in meeting this economic challenge? Have they therefore asked to have this legislation silent on this point? We are saying that if that is the policy of the government then we are offering this legislative drafting suggestion; this suggestion is necessary to cause this government

to be true to the commitments it has made.

We are very clear on where we stand on the National Broadband Network—there can be no doubt about that—but what underpins this amendment is that if a commitment has been made then it needs to be delivered on. That is the rationale on which we put forward this amendment.