Feb 8, 2012

Telecommunications Universal Service Management Agency Bill 2011, Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 & Telecommunications (Industry Levy) Bill 2011: Second Reading – Cognate debate

Mr ALBANESE (Grayndler—Leader of the House and Minister for Infrastructure and Transport) (17:56):  This debate has been on package of three bills, the Telecommunications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 and the Telecommunications (Industry Levy) Bill 2011. This package will provide a flexible, accountable and transparent model for delivering and funding public policy objectives in the telecommunications sector. The reforms contained in the bills being considered are aimed at ensuring continuity of key consumer safeguards through the transition to the National Broadband Network and into the future. These include ensuring reasonable access to standard telephone services and pay phones, the national relay service and the emergency call service. The bills address important unfinished business dating back to the privatisation of Telstra. They provide for increased transparency and rigour in the delivery of basic consumer safeguards. Under this approach, the realistic costs of delivering these important services will be appropriately recognised.

The Telecommunications Universal Service Management Agency Bill 2011 will establish a new entity to support continuity of key telecommunications safeguards in the transition to the National Broadband Network. TUSMA will be a small statutory agency with responsibility for the delivery of the universal service obligation and other public interest telecommunications services. Members opposite have suggested that TUSMA will employ an army of bureaucrats. This is clearly absurd, given that TUSMA’s administrative costs are expected to be around $5 million per annum.

TUSMA will enter into and administer contracts and grants for these services in accordance with the policy objectives set out in the TUSMA bill. The creation of TUSMA is necessary because the roll out of the wholesale only National Broadband Network will fundamentally change the structure of the Australian telecommunications market. These changes will see Telstra’s near ubiquitous national copper fixed line network progressively decommissioned as NBN Co. rolls out its next generation fibre network. The current USO regulatory arrangements that are imposed on Telstra were designed for a market in which there was a vertically integrated operator of a national telecommunications network. The new NBN environment will enable all retail service providers to offer high quality broadband services nationally. Therefore, in this environment, it is appropriate to introduce a more competitive and open model for delivering universal service and other public policy telecommunications outcomes. These new arrangements will benefit both consumers and industry by promoting more innovative, effective and efficient service delivery arrangements.

TUSMA will be subject to rigorous transparency and accountability requirements. This will help ensure that the costs to industry do not increase unnecessarily. The agreement with Telstra includes a range of incentives to promote cost savings. Further, a structured program of reviews provides opportunities for voice and pay phone services to be provided more efficiently. In relation to concerns that TUSMA’s scope should not increase unnecessarily, the legislation provides some flexibility so that the services that it delivers can be modified as circumstances change. However, any proposed changes would be subject to clear parliamentary oversight and scrutiny.

Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011 amends the universal service regime in the Telecommunications (Consumer Protection and Service Standards) Act 1999. The amendments mean that within two years of the commencement of TUSMA operations the minister must consider whether it is appropriate to remove the current regulated USO on Telstra to make the standard telephone service and pay phones reasonably accessible.

Subject to Telstra’s record of compliance with its contractual and regulatory obligations, the minister may then make declarations that will commence the process for lifting regulation and shifting to a contractual model for the provision of universal service outcomes. This process will be overseen by TUSMA.

The Telecommunications (Industry Levy) Bill 2011 provides for the imposition of a new levy. This levy will replace two separate existing industry levies and will contribute to meeting TUSMA’s costs for delivery of the USO and other public policy telecommunications outcomes. For the first time government will also be making a substantial contribution towards TUSMA’s costs and the delivery of key communications public interest safeguards.

The government’s budget contribution will be at least $50 million in 2012-13 and 2013-14 and then $100 million each financial year thereafter. The government has also committed to increase its base funding in the first two financial years so the contributors to the industry levy, with the exception of Telstra, will not face an increase to their aggregate funding contribution. Furthermore, the government has also committed to review the levy arrangements and the need for any additional budget funding above its committed base funding during the course of the first two years of TUSMA’s operation.

The TUSMA Bill creates a rigorous oversight and accountability framework. The new legislation will provide for TUSMA to have a board structure and require the minister to ensure that TUSMA includes members who have substantial experience in or knowledge of and significant standing in the operation of the telecommunications industry and business or financial management. These members will be expected to take a strong role in managing the costs of TUSMA activities. TUSMA will also maintain publicly available registers of the contracts and grants it administers and report annually to the minister on all significant matters relating to the performance of contractors and grant recipients; prepare a corporate plan every three years, as well as a comprehensive annual report; provide reports or information to the minister on specified matters relating to the performance of TUSMA’s functions and undergo a comprehensive review before 1 July 2018. This accountability framework, together with the existing reporting requirements for statutory agencies under the FMA Act will help give stakeholders the confidence that TUSMA will use its funding to fulfil its functions and policy objectives in an efficient, effective and appropriate manner.

Those opposite argue that the government did not follow due process in addressing its contract with Telstra for the delivery of the USO and other public interest services. However, Telstra is the primary universal service provider under legislation and is the only telecommunications provider with a national, ubiquitous, fixed line network which can be used to ensure the continuity of key telecommunications services during the transition to the National Broadband Network. I would also note that there have been contestability arrangements under the USO since 2001 but no alternative providers have sought to supply services under these arrangements to date—more than a decade ago.

People who are currently receiving key services need certainty that their services will not be disrupted, possibly for a long time, while a new USO provider rolls out a network or finalises negotiation for access to infrastructure. TUSMA’s 20-year arrangement with Telstra to deliver key services such as standard phone services and public payphones will ensure continuity of basic safeguards for Australians and will strengthen the safety net for rural and regional Australia. The agreement with Telstra does not preclude contestability for other key services that TUSMA will deliver under contract. Existing national relay service contracts are due to expire shortly and a competitive process will need to be run by TUSMA before 1 July 2013.

The government is also committed to TUSMA undertaking a competitive process for the emergency call service within five years. The member for Cowper has suggested two amendments to the bills. The government opposes these proposed amendments. The suggestion that TUSMA’s administrative costs should be offset by reductions in the administrative costs of the ACMA ignores the fact that the two will be doing different things. It yet again shows that those opposite simply do not get this area of policy. In any case, decisions about the administrative costs of government agencies are made in the budget context and it is not appropriate to specify them in legislation. The proposal for an independent STS review into the quality of standard telephone services delivered over the National Broadband Network ignores the very real improvements in quality that will be delivered by the NBN and the existing reporting measures that can provide information on this issue. Furthermore, the amendment is poorly drafted and the matters to be considered by the independent reviewer are complex, vague and not easily measurable in an objective manner.

We hear a lot from those opposite about the importance of telecommunications, sometimes talking about the importance of telecommunications in regional communities, but they voted against the National Broadband Network and they voted against piece of legislation after piece of legislation which I have brought before this chamber. I note the last speaker for the opposition on this bill, the member for Canning, was, on 2 February 2012 quoted in the Examiner, his local paper, complaining about the existing service and like many others demanding access to the National Broadband Network. They cannot have it both ways.

You cannot argue consistently against infrastructure and then complain that it is not being delivered quickly enough to your area when you voted against the very legislation which has provided the funding. Consistently we see that from those opposite. I must say that among all the pieces of legislation opposed by those opposite relating to the National Broadband Network voting against a universal service obligation, as they will be doing when they vote against this piece of legislation, is extraordinary and is against the interests of the electorates they represent, particularly against the interests of those who live in regional communities around Australia. By introducing a more contestable and flexible model for providing the USO, these bills will promote greater efficiency, transparency and competition in the delivery of the telecommunications services Australians rely on, while preserving key consumer safeguards. I commend the bills to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.