National Broadband Netowrk Companies Bill

The question before this House is: what is the appropriate way in which we should deal with a set of complex amendments which were made by the Senate in its processes on Thursday and Friday of last week? I put to the House that there are several reasons why it is not appropriate to simply move to an immediate consideration of these amendments.

I argue that the policy scheme surrounding the National Broadband Network, of which these amendments form part, is of the first importance and of considerable controversy. It does not, therefore, make sense to accede to the government’s desire to ram through a set of poorly considered amendments.

I secondly want to argue that the structure of the amendments that was put in the Senate was extensive in the extreme, and that, through no fault of the Senate, the capacity to have reasoned consideration of very detailed amendments—only disclosed by the government last Wednesday—was simply not there. There was simply not the capacity to have the detailed and reasoned consideration which properly ought to have been carried out, given the nature of these amendments.

Thirdly, I want to make the point that the impact on the telecommunications industry and on stakeholders in this sector is very substantial, and that is another powerful reason we ought to give careful, detailed and measured consideration to these amendments rather than simply acceding to the government’s request that they be rushed through.

Fourthly, I want to particularly highlight some of the serious policy concerns embodied in these amendments.

The first point I want to make is that the scheme surrounding the National Broadband

Network is of great importance and great controversy. You have a government which is pursuing a policy scheme for broadband in this country which reverses a 20-year bipartisan approach to telecommunications. For 20 years the priority has been to maximise and unleash the power of competition to deliver the best possible services to end users rather than seek, through direct government ownership, to engage in day-to-day provision of telecommunications services.

As a core part of that policy direction in Australia, as in so many other countries around the world, the formerly government owned telecommunications monopoly, Telstra, was opened up to competition and subsequently sold into private ownership. This government is now introducing a scheme of great controversy as it reverses that direction and returns to substantial government ownership of a telecommunications company and as it also seeks to buttress that ownership with a series of very concerning limitations and restrictions on competition in telecommunications.

The amendments that we saw moved and passed in the Senate on Thursday and Friday add, in a very serious way, to the limitations on competition. In particular, the new division 16, which has been added to the Competition and Consumer Act, imposes very substantial restrictions on the capacity of the Australian Competition and Consumer Commission to scrutinise and oversee the conduct of NBN Co. For example, it is now the case under the amendments which have been passed by the Senate that NBN Co. has statutory authorisation to refuse to supply a service except at what are called ‘listed points of interconnect’. In other words, everywhere across Australia NBN Co. can, with impunity, refuse to provide interconnection.

If it is not a so-called listed point of interconnect then there is no obligation to provide interconnection.

That is a fundamental change in the policy principles which have regulated telecommunications in this country for some 20 years. Throughout that period, a core principle has been the principle of any-to-any connectivity. That has been central to the regulatory regime and yet, at three minutes to midnight— or to be more specific, last Wednesday— a new set of amendments was introduced which dramatically reduce the degree to which NBN Co. is subject to the scrutiny of the ACCC if it refuses to provide interconnection otherwise than at listed points of interconnect.

Similarly, NBN Co. is now shielded from the scrutiny of the ACCC when refusing to supply in the context of bundles. Additionally, NBN Co. has been handed very wide powers to argue that it is doing something because it is necessary to achieve the principle of uniform national pricing. Because the new section 151DA operates as a statutory authorisation, it effectively shields NBN Co. from the scrutiny of the ACCC in determining if there has been anticompetitive conduct under either the general law provisions in the Competition and Consumer Act or under part XIB, the telecom-specific competition provisions

of the Competition and Consumer Act. The remit of the amendments, which were first revealed last Wednesday and which were passed by the Senate in unseemly haste on Thursday and Friday, is very broad. As a corollary, the degree to which it was possible to have appropriate scrutiny and consideration of these amendments was modest indeed.

You need merely look at the list of Senate amendments which has been prepared to see the number of those amendments which were moved by Senator Xenophon. I certainly do not criticise Senator Xenophon for a second—on the contrary, I congratulate him for his assiduous efforts to try to correct a deeply flawed legislative scheme. It is a scheme which is deliberately intended to allow NBN Co. to amass extraordinary market power and to exercise that power quite independently of and quite protected from the scrutiny of the ACCC. I congratulate Senator Xenophon for his assiduous efforts to correct a deeply flawed set of amendments, but I do ask this question: what has gone wrong when the government is moving, at very late notice, very detailed provisions which are manifestly flawed and it falls to one Independent senator to try to make some corrections?

I also want to put on the record my admiration for my coalition colleagues in the Senate who worked assiduously to seek to improve this ramshackle and inadequate set of provisions. Senator Birmingham, Senator Fisher, Senator Macdonald and many others in the Senate worked extremely hard to try to correct the gaping flaws in this legislative package.

The point I am making is that, when we have had legislation rammed through at such short notice, when there has been so little time for consideration of the merits of these very detailed measures and when it is only thanks to the work of an Independent senator who has sought to make some last-minute corrections at very short notice with the limited resources available to him, does that not say to us that we have here a legislative package which could benefit enormously from some calm reflection and some detailed analysis of whether the provisions actually work or whether, as is evident from even the most cursory review, the policy underlying them is deeply flawed because, amongst other things, it greatly expands the likely market power of the National Broadband Network Company, the NBN Co. and greatly reduces the level of competition that will prevail in the telecommunications sector?

The third point I make is that this is not just of interest to telecommunications policy wonks—if I could perhaps describe myself and a number of others in this place and the other place in that way—and it is only that small community of persons whose interests are affected by the work the parliament is doing today. The telecommunications sector is enormous and is of great economic and social importance, and yet the major players in this sector—Telstra, Optus, members of the Competitive Carriers Coalition, such as AAPT—were unable to have more than 36 hours to consider these amendments before the Senate was in a position to vote on them. That is no way to go about making comprehensive and extensive amendments to a very detailed legislative scheme. It is no way to treat investors in this multibillion dollar industry, to completely sweep away from them any capacity to have certainty as to the regulatory regime under which their investments will be regulated.

When you have regard to the nature, the extent and the importance of the stakeholder interests that are affected by this set of amendments which have been rushed through with very inadequate preparation and consideration, it is self-evident, I would put to the House, that we need to take more time rather than accede to this government’s request or proposal that we simply rush through on a nod and a wave this complex package of amendments without giving them more detailed consideration.

The fourth point I want to highlight is that embedded in this package are some very significant and deeply unpleasant provisions. I want to particularly highlight section 151DA. This is a section which provides, amongst other things, that if you breach proposed section 143 of the Telecommunications Act, you are committing a criminal offence and you are exposed to 20,000 penalty units. In substance, you are exposed to that sanction if you choose to operate a network— a so-called ‘superfast fixed-line network’ is, I think, the defined term—and you fail to offer a layer 2 bit-stream service. This is truly a return to the bad old days of economic policy in Australia, the days when attempting to sell eggs or milk or any other commodity except under the watchful eye of the relevant state government marketing board exposed you to being followed by inspectors, to prosecution and involved in the extraordinary squandering of state resources dedicated to suppressing energy, innovation, creativity and competition. But that is what we have gone back to in this country in the telecommunications sector by reason of this legislative scheme which has been seriously embellished by the amendments passed by the Senate on Friday—the amendments which it now falls to the House to consider the merits of. Included within that set of amendments, as I highlight, is this deeply unsavoury provision, section 151DA, which allows for the imposition of a penalty of up to 20,000 penalty units should you have the temerity to want to deliver a high-speed broadband service in competition with the National Broadband Network.

Does that not highlight how fundamentally misconceived this entire legislative scheme is? What has gone wrong in this country when we are imposing penalties upon people, companies and economic units that want to compete and invest and want to deliver services in competition with the government’s own National Broadband Network Company? This is a dark day for economic policy in Australia. We on this side of the House firmly reject the notion that we should just wave through this package of amendments.

It deserves detailed scrutiny.