Paul Fletcher on 6PR Perth, 7 October 2014

HOST 1:

Well the Federal Government has released a list of 6000 locations that are eligible for better mobile phone reception. But only about 250 new towers are expected to be built over $100 million programme to try and eliminate mobile phone black spots. Parliamentary Secretary to the Communications Minister Paul Fletcher told Cameron Wilson it’s now up to the telephone companies to nominate where they want to build the new towers.

PAUL FLETCHER:

So this database of locations which Australians say don’t have adequate coverage is the starting point. Then we go to a competitive selection process, with that expected to commence within a matter of weeks and out of that competitive selection process all of the sites that have been put forward by the carriers will be assessed and they’ll be weighed up based upon things like total number of square kilometres that will now get coverage from a proposed base station that didn’t get it before; a total number of premises that will now get coverage that didn’t get it before; total number of kilometres of road that didn’t have coverage before that will now have it. Based upon that, the Government will decide on a site-by-site basis, from the lists put forward by the carriers, which locations we will fund out of this $100 million fund with the view to getting best bang for taxpayer’s buck.

HOST 2:

So, based on the process, if the carrier, your Telstras or Optuses of the world, if they don’t put forward their wish to build a station, that eliminates an area straight away does it does it – you won’t proceed; they’re out of the picture?

PAUL FLETCHER:

That’s right, and the reason for that is we’re expecting the carriers to come forward with funding as well. So the $100 million will go a significant way, but we also expect to leverage about another $100 million from the carriers, and from potentially other sources including state governments and local councils. And so therefore it is important that the carriers have some involvement in the choice of location, but we did want to make sure that we started with a database of locations nominated by Australians, and that’s what (inaudible) have to choose from. We didn’t want to go first straight off the bat to the carriers and say, ‘You tell us.’ We wanted to go to the community first and say, ‘You tell us the locations which you think don’t have coverage.’ That becomes the starting point that we then take to the carriers.

HOST 2:

Would it be fair to assume that the carriers are going to look at those areas are going to look at those areas that have some commercial benefit to them, and they’re more likely to, say, bid or tender for a station in a coastal town with a lot of traffic than, say, somewhere along the Oodnadatta Track or Birdsville Track that services a handful of cattle stations?

PAUL FLETCHER:

To some extent, but the key point is that the carriers will put up their list, and then the Government will choose which sites get funded.

HOST 2:

Yes, but if they don’t put those up on the list to begin with then that’s the end of the story for those phone areas?

PAUL FLETCHER:

That’s true, but bear in mind there’s competition here. There’s competition in two ways: competition between the sites, but also competition between the carriers. So the carriers might put up a list which looks great from their point of view but they can’t be sure what the other carriers are going to do. So the intention here is to bring, to have some competition operating. Now it is important that the sites are ones which the carriers are prepared to keep operating on an ongoing basis because there won’t be an ongoing subsidy. It’s also important to make the point that the carriers are spending substantial amounts of money each year already upgrading their networks – Telstra over a billion dollars. But this is about sites that would not be commercial without the subsidy the Government’s putting in becoming ones that are viable for the carriers to propose.

HOST 2:

Will there be any imperative for… say Telstra builds, wins the tender, and builds a base station, will they have to provide access to your Vodafones and Optuses as well?

PAUL FLETCHER:

That’s an excellent question because one of the things we want to do is use this public money to stimulate competition. So the answer to that is yes. If a particular carrier wins the funding for a base station it will then need to go to the other two and say are you interested in being on this base station. If they say yes it needs to work with them on the design of the tower, because it’s a lot cheaper to design a tower upfront for what’s called ‘colocation’ rather than designing it to meet the needs of one first then trying to fit the other two in later. Additionally, the rules of the programme will say, if you get the funding for a base station then the pricing that you charge to the other two for access to that base station must reflect the value of the public subsidy you’ve received.

HOST 1:

That’s Parliamentary Secretary to the Communications Minister Paul Fletcher, speaking there with Cameron Wilson.

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