Additional Comments by Labor Senators

Additional Comments by Labor Senators

The Telecommunications Legislation Amendment (Regular Reviews and Other Measures) Bill 2005 has been promoted by the Government as the means by which rural and regional telecommunications services will be 'future proofed' after the sale of Telstra.

Labor Senators believe the Bill manifestly fails to achieve that objective.

Rather, it is part of an ongoing effort by the Government to create the perception that it will address service deficiencies in rural and regional Australia in an attempt to garner community support for the full privatisation of Telstra.

Like the vast majority of Australians, particularly those in rural regional areas, Labor remains opposed to the further sale of Telstra as it will only lead to the deterioration of service standards.

The principal measures in the Bill facilitate the imposition of a local presence plan on Telstra and establish a mechanism for regular reviews of the adequacy of telecommunications services in rural and regional Australia.

Labor Senators do not oppose these initiatives but believe that their limitations should be acknowledged. The Bill only tweaks the edges of a telecommunications regulatory regime that is fundamentally flawed.

Furthermore, it is important to note that the provisions allowing the Minister to approve a local presence plan do not guarantee any particular level of local presence by Telstra.

The Minister has stated that the requirements of the local presence plan are being 'negotiated' with Telstra.

Similarly while reviews of services standards in rural and regional are worthwhile, the fact remains that the mechanism established by the Bill does not commit the Government to spend any money on improving services regardless of the level of need identified by the Review.

In this respect the Bill clearly fails to implement Recommendation 9.1 of the Estens Inquiry which stated that the review process should be 'underpinned by ongoing arrangements that provide a high degree of certainty that Government funds will be made available to support service improvements in regional, rural and remote Australia'.

Labor Senators welcome the fact that the Chairs' report recognises a number of flaws in the Bill. In particular, Labor Senators endorse Recommendations 1, 2, 4, 5 and 6 which were supported by the overwhelming weight of evidence received during the committee's inquiry.

Importantly, these recommendations improve the transparency of the process of developing local presence plans and reduce the period between reviews to a maximum of three years.

However, Labor Senators believe that the operation of the review process can be improved by two further amendments.

Independence of members

Further amendments are required to strengthen the independence of the review committee.

Currently the review committee may include members of Telstra or its subsidiaries subject to the restriction that they cannot constitute a majority of the committee.

The Chair's Recommendation 3, limiting carriers to one position, would improve the independence of the review committee.

However, Labor Senators do not believe that the committee would be seen as independent by the community if it included an officer or employee of any carrier.

Carriers should of course be able to provide support and advice to the review but there is no need for them to have formal representation on the committee.

Scope of the review

Currently the Bill provides that the RTIRC should examine the adequacy of the services in rural and regional Australia.

Evidence presented to the Committee highlighted the importance of the telecommunications sector to Australia’s economic performance and made a case for regular reviews with a broader outlook.

Labor Senators believe that the Bill should be amended to expand the review committee’s terms of reference to permit it to consider a wider range of matters.

The committee's ambit should include a consideration of issues such as: whether telecommunications services are meeting the social and commercial needs of the Australian people; whether services are reasonably available throughout Australia; and whether competition is operating effectively.

The adequacy of rural and regional issues would no doubt still be a focus of the committee’s work within this more expansive charter.

HiBIS

While the operation of the Government's HiBIS scheme is strictly beyond the Committee's terms of reference, the Chair's unqualified praise for this program in paragraph 2.12 cannot pass without comment.

Labor Senators believe that HiBIS is a deeply flawed initiative.

Figures obtained from the last round of Senate Estimates show that 64 per cent of the funding that has been allocated to date under HiBIS has gone to Telstra.

Community telcos and regional ISPs have the right to wonder why the government is subsidising the already dominant Telstra, to the tune of almost $12 million so far, to compete with them in regional areas.

Some smaller ISPs are being locked out of HiBIS by the complex and bureaucratic nature of the application process.

For example, customers that are signed up after beginning the application process, but before being accredited, are not eligible for the subsidy.

Another limitation on the ability of new entrants to take advantage of HiBIS is their inability to access backhaul services on reasonable terms under the access regime.

The Senate Inquiry investigating the adequacy of the telecommunications regulatory regime has heard much evidence that on the backhaul routes for which Telstra is the only supplier, quoted prices for access are extraordinarily high.

The fact that the majority of the money being allocated under HiBIS is being used to entrench Telstra’s dominance in rural and regional areas should be a major issue for the government.

Labor is also concerned that the majority HiBIS money has been spent funding satellite services that will not actually result in any new infrastructure for rural and regional areas.

Labor Senators will continue to pursue the flaws in the HiBIS program during forthcoming Estimates hearings.

Recommendations

Labor Senators support the Chair's recommendations 1, 2, 4, 5 and 6.

In addition, Labor Senators believes that the Bill should be amended to:

Senator Kate Lundy
Australian Labor Party

Senator Stephen Conroy
Australian Labor Party

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