Nov 2, 2011

Second Reading – Telecommunications Universal Service Management Agency Bill 2011

Mr ALBANESE (Grayndler — Leader of the House and Minister for Infrastructure and Transport) (10:05): I move:

That this bill be now read a second time.

The Telecommunications Universal Service Management Agency Bill 2011 is the cornerstone of the package that I am introducing today to achieve continuity of key telecommunications safeguards in the transition to the National Broadband Network. The other bills in the package are the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy) Bill 2011.

The regulatory arrangements for the universal service obligation (commonly known as the USO) were designed for a market where there was a single vertically integrated operator of the national telecommunications network. Implementation of the government’s National Broadband Network policy will result in a fundamental change to the structure of the Australian telecommunications market as Telstra’s near ubiquitous national copper fixed line network is progressively decommissioned as NBN Co. rolls out its next generation fibre network.

We are moving to an environment where all retail service providers will be able to offer high-quality voice and high-speed broadband services nationally using the National Broadband Network. It is appropriate that as we move to this new environment the model for delivering universal service and other public policy telecommunications outcomes be reformed to facilitate the competitive supply of these services and outcomes. A regime that enables competitive supply arrangements will benefit consumers and industry by promoting more innovative, effective and efficient service delivery arrangements. On 23 June 2011, the government announced that it had entered into an agreement with Telstra to deliver universal service and other public interest services. As part of the reforms embodied in that agreement, the government will establish a new statutory agency, the Telecommunications Universal Service Management Agency to be known as TUSMA. It will manage the Telstra agreement and other contracts and grants (including the two existing contracts for the provision of the National Relay Service). TUSMA’s remit is to ensure that all Australians continue to have reasonable access to universal service and other public interest telecommunications services.

The Telecommunications Universal Service Management Agency Bill 2011 establishes TUSMA and sets out the governance structure of the agency, including its functions and powers in contracting for public policy outcomes. It creates a rigorous transparency and accountability framework for TUSMA’s activities. This bill also establishes arrangements for the collection of levies from the industry.

The bill provides that TUSMA will be established as a statutory agency under the Financial Management and Accountability Act 1997, and its CEO and staff will be employed under the Public Service Act 1999. The day to day administration of TUSMA will be the responsibility of the CEO, but decisions that affect industry and consumers will be made by a chair and other appointed members who together will have the right mix of skills and experience to fulfil TUSMA’s statutory objectives.

TUSMA will be able to enter into and manage contracts or make and manage grants for financial assistance on behalf of the Commonwealth. These contracts and grants must address clear policy objectives based on the current legislated objectives for the standard telephone service and payphone components of the USO, the National Relay Service and the emergency call service. It will also cover the provision of programs to support the continuity of supply of carriage services during the transition to the NBN. TUSMA will be required to take all reasonable steps to ensure that the policy objectives are achieved in performing its functions and exercising its powers.

The bill provides for the minister to make standards, rules or benchmarks by legislative instrument for the universal service components of the agreement with Telstra, and for future contracts and grants. Service providers with whom TUSMA has a contract will be required to comply with these standards, rules or benchmarks.

The bill includes transitional provisions to ensure that TUSMA is responsible and accountable for managing the Telstra agreement and the existing National Relay Service agreements.

TUSMA’s reporting obligations will be extensive. Not only will TUSMA be subject to existing reporting requirements under the FMA Act but it will have additional obligations, including maintaining public registers of grants and contracts and obligations to report annually to the government and the parliament on the performance of contracts and grants. The transparency and accountability provisions are important protections that will enable scrutiny and evaluation of TUSMA’s performance.

The government will commit base funding to TUSMA of $50 million over each of the two financial years 2012-13 and 2013-14, and $100 million per annum after that.

TUSMA’s residual funding requirements will be met through a consolidated industry levy scheme which, from 1 July 2012, will replace the current USO and National Relay Service levies and also cover future funding for TUSMA’s other responsibilities.

The accompanying Telecommunications (Industry Levy) Bill 2011 imposes an obligation on industry carriers to pay the levy. The Telecommunications Universal Service Management Agency Bill 2011 covers arrangements for collecting the levy and determining liability.

The amount each telecommunications carrier has to pay towards the levy will be based, as is currently the case for the USO and NRS levies, on its eligible revenue as assessed by the Australian Communications and Media Authority. The Australian Communications and Media Authority will remain responsible for collecting the levy and determining who must pay.

Transitional mechanisms are set out in the accompanying USO Reform Bill. The bill also provides for a review of the act, any legislative instruments made under the act, and associated provisions of the Telecommunications Act 1997 before 1 January 2018.

This is an important package of legislation. Together, the three bills will provide certainty for all Australians that transparent and accountable consumer safeguards consumer safeguards will continue to be delivered in the transition to the National Broadband Network. The Telecommunications Universal Service Management Agency Bill 2011 contains key measures in these reforms by establishing an independent body that will transition the industry from regulated obligations to a more flexible service provider model that will promote greater efficiency, greater transparency and greater competition in public policy delivery. I commend this bill to the House.

Debate adjourned.