Jul 5, 2011

Telecommunications Legislation Amendment (Fibre Deployment) Bill 2011

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (18:35): I thank all members who have participated in this debate on the Telecommunications Legislation Amendment (Fibre Deployment) Bill. A great deal of the opposition’s comments have focused on its opposition to the NBN as a matter of policy, not on the substance of the bill before us. In the interests of time I will focus on the bill before us.

The government does not agree that, in the absence of public sector investment, Australia will have the infrastructure that we need to compete in the 21st century. This is demonstrated by the private sector’s failure to provide this infrastructure, even with the offer of government funding under the original NBN request for tender process. As other government speakers have detailed, many problems with broadband access relate to the copper network, which is inadequate and failing: wireless that is inadequate to the demands being placed on it and fibre provision that is extremely limited and patchy. The opposition have made much of the government’s statement that it is committed to competition in the provision of new infrastructure; however, they fail to note that the government has also consistently said: ‘If alternative providers want to compete with NBN Co., they are welcome to do so, but it is on the understanding that they have the resources and ability to do so.’ Much has also been made of the existence of the competing fibre industry. There are a number of alternative providers, around 10 of them. They have some technical expertise and experience. But I think the word used repeatedly in the opposition’s dissenting committee report on this issue is very telling. It is a ‘nascent’ sector—that is, it is in its earliest stages. They are very small-scale operations; they have typically serviced developments that have been the most commercially advantageous—they have been able to pick and choose which they service. By their admission in evidence to the Joint Committee on the NBN they are not well placed to service Australia as a whole. Around 200,000 new premises are constructed each year. These providers do not have the scale to deal with this; it needs a national operation. Even if they could, they would require extensive subsidies both for fibre and for backhaul. The reality is they want to cherry-pick the lucrative markets while leaving NBN Co. to do the hard ones and provide national coverage.

The government has established NBN Co. to provide improved broadband for all Australians, with uniform national wholesale pricing. This includes in new developments. NBN Co. can spread its costs nationally and recover them over time. If other providers wish to compete with it, they are free to do so, but it is up to them to do so on their own terms.

The bill before us provides a framework for the installation of fibre-ready telecommunications infrastructure in new developments. The purpose of the bill is to ensure that new developments are ready for fibre based technology. It is part of the government’s strategy to build a superfast broadband network that will underpin our future productivity and competitiveness and meet the needs of our nation. If fibre-ready infrastructure is not installed in new developments it will have to be fitted later. This will cost more for every house and business than doing it upfront. Retrofitting would also be disruptive. It is simply more sensible to install the fibre-ready ducting in the trench that is already open. Fibre can then be installed when the house is occupied or pulled through later.

Having said that, this bill is a safety net. Most developers are already installing fibre-ready infrastructure and we expect that most will continue to do the sensible thing. This is sensible preparation for fibre and appears to be generally accepted. It is accepted by the Joint Committee on the NBN, which has recommended that the bill be passed. Many fallacies have been put forward as to what the bill covers. Let’s be clear: the bill will require developers that are constitutional corporations to install fibre-ready passive infrastructure like pit and pipe. It does this by imposing a penalty on corporations which sell or lease land or buildings in new developments without such infrastructure. This is not unique. Developers have long contributed to the cost of a range of infrastructure.

The bill also supports the rollout by creating an access regime covering non-carrier-owned pit and pipe and by making it easier for ACMA to make standards for customer premises equipment and in-house cabling. It allows the minister for communications to specify conditions for fibre-ready infrastructure, though it is the government’s preference that industry make a code or standard. This power is in the bill as a safeguard in case there is delay in making such industry specifications.

Much of the debate has been about things that are not in the bill. The bill is intentionally narrow in its scope. It supports a rollout of fibre. Contrary to the assertions of those opposite, the bill is not about conferring special privileges on NBN Co. or preventing other providers from providing service. The bill is about ensuring necessary passive infrastructure used by all fibre providers is available. The bill does not impose NBN Co.’s standards on others. The government has stated consistently that it expects that the industry will make a code. The bill does include a fallback provision for the minister to specify features of fibre-ready infrastructure if necessary to be used if no industry code or standard is available. Any such instrument would be subject to consultation and to disallowance by the parliament.

Some concerns have been raised about what will happen in smaller developments pending the rollout of fibre. Contrary to opposition assertions, it will not be a case of a developer putting in fibre-ready pit and pipe, and it being left empty pending NBN Co.’s arrival. Developers will be able to go to the fibre provider of their choice or Telstra will install copper pending NBN Co.’s arrival. NBN Co. will also be able to provide fibre in these developments if it is practicable for it do so. This is a simple transitional reality. The default solution in Australia has been the provision of copper infrastructure in new developments. We are now moving to a world in which fibre will be the default solution. This is a major change. It cannot be done all at once, and a transitional approach is needed. The most cost-effective approach is to continue to provide copper in smaller developments pending the rollout of fibre. The approach proposed by the government ensures everyone has access to quality telecommunications, although some developments will necessarily receive fibre before others. The thresholds that have been put in for the provision of fibre reflect a reasonable break point at this time but they do not preclude any developer having fibre installed anywhere.

The opposition has proposed a number of amendments to the bill which seem aimed at three objectives. First, the amendments would require NBN Co. to operate a scheme under which it would be forced to fund fibre infrastructure that developers choose to have installed, subject to it meeting industry standards and cost controls. Second, they would seek to narrow the minister’s ability to specify conditions for pit and pipe and other infrastructure. Third, the amendments would enable small carriers in new developments to operate a vertically integrated business model. It is far from clear that the amendments as circulated would achieve their stated purpose. More substantively, the amendments go well beyond the scope of the bill and seek to raise much wider, more fundamental issues. The opposition has again chosen to turn a non-controversial bill that simply seeks to ensure fibre-ready passive infrastructure is installed, a practical objective on which everyone who has spoken on the bill agrees, into an ideological debate over the NBN. This should not be the case. The government consider the amendments to be unnecessary and ill considered and therefore we will be opposing these amendments.

In summary, this bill will support the rollout of the fibre based network by requiring that fibre ready infrastructure be installed in new developments. This means that carriers, including NBN Co., and households will be spared the expense and the disruption of retrofitting. It means that households and businesses will be ready for the fibre based communications of the future, with all this means for higher productivity, more efficiently delivered government services and a better quality of life. This is the bill’s simple objective and one that everyone seems to agree is common sense. We know that the National Broadband Network during the past month, through its agreements achieved with Telstra and with Optus, has achieved significant advances. This bill should be supported on the basis that its objectives are clear and that everyone agrees that it is common sense. We should not confuse this issue with unproductive detours into much broader issues. I commend the bill to the House.

Question agreed to.

Bill read a second time.