SECOND READING SPEECH
SENATOR RON BOSWELL
Wednesday 14th May
Senator BOSWELL (Queensland) (11.44 am)— I join this debate because I have some concerns about the broadband future in Australia. I make this contribution because the Telecommunications Legislation is certainly required. The importance of the bill cannot be underestimated in the quest to deliver Australiawide the most efficient and best value for money national broadband network for the taxpayers’ dollar.
The bill does not argue how the money should be raised to build a national broadband network. It does not argue about how the technology should be delivered.
Instead this bill legislates for carriers to provide information so that other bidders can put forward a competitive bid, taking into consideration the assets that are to be used.
The bill recognises that considerable fibre-based broadband infrastructure already exists and that any plan to extend the fibre-based network is more likely to involve adding additional segments to the current network.
For bidders to be able to submit tenders that are credible, a level of disclosure about the assets that currently exist is required. This requirement has been pressed by non-Telstra proponents, including the G9 consortium. I do not know why Senator Conroy, who is so very close to Telstra, did not tell them to get off their backsides and deliver the information that the G9 component of the bid wanted. I think it is a sad day in Australia when an important piece of telecommunications infrastructure such as a national broadband network, with only two months until bids close, has to have such a piece of legislation debated to stop the schoolyard nondisclosure of information about the status and assets of our own telecommunications system.
It is a sad day too when, despite the lack of detail surrounding the government’s proposal, the only certainty is that Labor is willing to spend $4.7 billion of taxpayers’ money on a broadband plan but has no idea what the money is going to buy. And $2 billion of that $4.7 billion was knocked out of the Future Fund that was there to guarantee any future developments or increases in technology to rural and regional Australia, where the market would not work because of lack of people. The National Party fought very hard for that $2 billion. In fact, it was part of our agreement to support the sale of Telstra that the $2 billion be allocated to guarantee that rural Australians were not left behind, as they were when we came into government 12 years ago.
When we came into government 12 years ago we had a steam-driven telecommunications system in rural Australia. In fact, one of the ironies of it was that a station could talk to the cottage next door, 50 yards away, and it was a long-distance call. I do not ever want to see that happen again. In our 12 years in government we remedied so many of the failures of the telecommunications system. To guarantee it never happened again, we put $2 billion into a telecommunications Future Fund, which this government could not keep their hands off and have raided. But that is a matter for another debate.
As my colleagues have commented, the government is rushing into a major policy blunder with anticompetitive consequences in order to fill an election program. If they do not get this tender process for the national broadband network right then we are going to be in serious trouble. I am concerned that this legislation, even if it is rushed through with the greatest of efficiency, will only give the competitors two months to gain the information required to put forward a reasonable bid on such a major communications infrastructure project as this. Surely this bidding process is important enough that, if this legislation goes through, an extension of time should be provided. There has to be an extension of time. I call on the minister, Senator Conroy, who seems to have slipped his mooring and is out of the chamber at the moment, if he is serious about this, to provide that.
You do not just go and buy a network off the shelf. It has to be designed. It has to be structured. The minimum it will cost is $4.7 billion. It will probably go to $11 billion when the telcos put in their money. Let’s say it is $8 billion. You cannot just design and put forward a tender to the government in two months, and you certainly cannot do it if you do not have the information.
If the minister is serious about competition, and serious about having a network with competition in it, then he has to realise his first port of call should be to one of the engineers in his department. He should ask him: ‘What is a reasonable time to design a network right across Australia that will deliver broadband to 98 per cent of the people?’ If his highly qualified engineer is right, honest, and prepared to give strong advice then I am sure that he would say: ‘Minister, I don’t think two months is time enough to deliver such an intricate piece of infrastructure.’
So we have $4.7 billion of infrastructure and two months to put forward a bid that will cover the whole of Australia. The documents say the winning tender will have to build a national broadband network providing 98 per cent of premises with speeds of 12 megabits a second. Fibre-to-the-node or fibre-to-the premises technologies are specified, along with open access arrangements that allow all service providers access to the network on equivalent terms.
I read an editorial in the Financial Review of 22 April which I agree with. It said that it all sounds very pro-competitive but, as the article points out, the reality is that Telstra starts with a huge advantage. The first advantage is a technical advantage, because, if a fibre to- the-node network is to be built, the builder of the network will have to interconnect with Telstra’s copper network at about 20,000 local nodes. Telstra owns the copper network and has the commercial information on where the nodes are, the age of the nodes and their condition. National broadband network tenderers require technical information about certain aspects of the existing fixed network in order to develop and cost their bids, which are due by 25 July. It is now 14 May and we have about two months to go.
This amendment sets out a scheme for the provision of information specified by the minister in a disallowable instrument and for the protection of the information that is provided by the carriers. But the bill itself says very little, only enough to pave the way for the yet to be outlined instruments, which basically gives the minister the scope to demand, on a whim, sensitive information from Telstra about their existing network and their infrastructure. I have seen several examples in the past of telcos being forced to provide information, and I must say that, if a telco has the choice of providing the information in an easy-to-read way or in a hard-to-read way, they will invariably go for the hard way. I have seen examples of rooms full of useless information being provided with the important and relevant documents intermingled amongst them, where it takes months and months to sift out what you are looking for.
To ensure that competitors are allowed an opportunity to provide a credible bid, it is important, firstly, that the information is made available, but it is also important that the nature of the information made available is both on time and relevant. The bill does not provide any detail or clarity as to how confidential information will be protected from misuse. The minister has previously threatened that, if telcos did not provide information about existing network infrastructure, he would legislate to make them. Now we have the legislation in front of us, so obviously the minister has failed at the first hurdle. Telstra have thumbed their noses at him, so he has done the thing that he is required to do: bring forward this legislation.
This must be the first straw in the wind that there is an element of noncompliance from telcos, and these are very worrying signs as to how negotiations are progressing with the bidding war. Telstra are not going to make it any easier for G9 to have any advantage, even a fair advantage— and we have seen this happen time and time again. They will play this out in the courts; they will play it out any way they can to extend the time and to block and obfuscate any information that has to be delivered.
The coalition is going to support this bill, but it is going to put forward some very good amendments that will take up some of the issues I have enunciated in my speech.
We want to see a competitive bidding process to ensure that taxpayers are getting the best value for their dollar. We are concerned that, due to the rushed nature of the government’s process, they will not get the best quality bids available. I say again: to put forward a bid of around $8 billion, $9 billion, $10 billion or $11 billion in two months is impossible. I have had to do bids for government from time to time on paintbrushes, garbage bins and very minor things like that. Of course, they are not complicated but it takes two or three weeks to even put in a bid for something very simple, yet here we are with the most complex bid on the most complex piece of infrastructure ever to be introduced in Australia and the minister has said that you can do it in two months. It is impossible.
We have to question your motive, Minister. Are you making sure that your mates in Telstra are going to get this bid? Are you being fair dinkum? I say that because you were very, very close to Telstra in the last election—in fact, it was almost on your campaign team. I want to know whether the two months you are allowing for this bid is just some sort of window-dressing to say: ‘I tried and the G9 couldn’t put in a competitive bid because I didn’t give them time. But I tried. I was tough; I even threatened Telstra and I even moved legislation. That would bring them into line.’ If you are fair dinkum you know that you cannot do this in two months. You cannot do it. You know that. Anyone in your department— and I presume you have some very highly qualified engineers there—will tell you that you cannot do it. It is just impossible to do it.
I say to you, Minister: you are playing with a lot of money. You are playing with $2 billion worth of money that you stole from regional Australia. You took it; you raided our Future Fund.
Senator Sterle interjecting—
Senator BOSWELL—You took $2 billion dollars.
If the legislation goes through, and I hope it does not—you took $2 billion away from rural and regional Australia to transfer it to providing infrastructure for the cities.
Senator Sterle interjecting—
The ACTING DEPUTY PRESIDENT (Senator Hutchins)—Order! Senator Boswell, please continue.
Senator BOSWELL—Thank you for the protection, Mr Acting Deputy President.
The ACTING DEPUTY PRESIDENT—I have to call Senator Sterle into line sometimes!
Senator BOSWELL—I have said that we would like to see a competitive contract, and we do not think we are getting one. This is potentially one of the largest tenders in Australia’s history and the concern is that for a highly technical, high-cost bid there seems to be very little time for competitors to gain the information required to put in a bid. It is also important that the national broadband network has the environment in place where competition will flourish once it is established.
I want you to listen to this, Minister, because this is important: we certainly do not want to see another CDMA network situation, where everyone had open access to the network until Telstra twisted your arm and you shut it down. In this case it is the copper wire network, and it creates a Telstra monopoly. We do not want to see a monopoly; we want to see open access. In the case of
CDMA, which was open access, when it was transferred to G3, everyone got shut out, including Australia’s most remote rural dwellers.
Senator Conroy—You are amazing!
Senator BOSWELL—It was amazing—the phones of 13,000 people, including Aboriginal communities and flying doctors who had phones that worked on the CDMA, were made redundant; the most remote Australians you disadvantaged. The whole point of a deregulated telecommunications industry was to encourage competition, whether that be through bidding for major projects or the competitive retailing of products. The rushed nature of this process does not hold us in good stead when it comes to competitive bidding for the national broadband network.
We in the coalition are committed to doing all we can to ensure this bill is a clear and detailed piece of legislation that assists with the exchange of existing broadband infrastructure information but, at the same time, provides adequate safeguards in relation to how this information is used and that there be competition. I am terrified that what happened to CDMA will happen if this is not a strong bid. OPEL, who spent millions of dollars, got wiped out by your say-so.
This is probably the first time in the history of Australia— it might happen in Nigeria or Zimbabwe— where an incoming government is not honouring the commitments of the previous government. The G9 consortium was asked to go and whistle in the wind for all the money that they spent on putting a bid together.
That sort of thing discourages anyone putting in a bid. These bids are expensive; they cost huge amounts of money. On a whim you just wiped the last one out, and that has never been heard of in the history of Australia. I suppose it is the new way the government are going to work, because they have done the same thing with the Regional Partnerships project.
I get diverted. We want broadband that works. We want broadband that will deliver to 98 per cent of the people. You say you can deliver it; I say you cannot do it in two months. The challenge is yours, and I hope that you will forget your politics, forget your commitments to Telstra because they assisted you in the last election and play the game straight down the line.