Chapter Two
Inquiry issues
Support for the bill
2.1
The committee invited submissions from over 45 organisations within the
utilities and telecommunications sectors, and including Commonwealth, state and
territory governments. Nine written submissions to this inquiry were
subsequently received, which were generally supportive of the government’s new
policy objective to provide a fibre-to-the-premises (FTTP) broadband network to
90 per cent of Australian businesses, homes and schools.
2.2
The two major telecommunications infrastructure owners and operators,
Telstra and Optus, were both supportive of the requirement to access accurate
information about existing telecommunications and utility infrastructure and
the consequent need for the amendment.
2.3
Optus was most positive in their support, stating in their brief
submission that they had ‘no concerns’ with the proposed amendments and see
this bill as ‘a necessary piece of legislation to assist with the efficient and
cost effective roll-out of the NBN.’[1]
Although Telstra made suggestions for additional considerations by the
government, they re-state their recent public commitment to ‘engaging
constructively with the Commonwealth and other stakeholders...’[2]
2.4
Similarly, in their submission, Unwired provided several suggestions for
improvements to the bill, but could see no reason ‘why the Bill should not be
adopted in its current form.’[3]
Mr David Havyatt from Unwired highlighted in his evidence before the committee
that the information sought by this bill was 'particularly critical to be able
to make a decision about how [the NBN] would be deployed.'[4]
Consultation on the bill
2.5
The committee notes the lack of formal consultation with utilities about
the legislation prior to its introduction, which 'came as a surprise' to
several submitters.[5]
2.6
The Department indicated that it would have preferred to have undertaken
wider consultations, but in practice it had not been feasible in the time
available. It noted, however, that the intention to simplify access to
infrastructure including that of non-telecommunications utilities, where
technically feasible, was foreshadowed in the government's National
Broadband Network: Regulatory Reform for 21st Century Broadband Discussion
Paper released on 7 April 2009.[6]
2.7
While it had not been possible to consult directly with carriers and
utilities potentially affected by the legislation prior to its introduction,
the Department advised that it had since met with the Energy Networks
Association, the Water Services Association of Australia and the Australasian
Railway Association, as well as carriers.[7]
The Department added that, while it had not had detailed discussions with
utilities about the specific information that would be required, it had
provided 'some guidance on the nature of the information to be sought.'[8]
Requirements unclear
2.8
The committee heard a number of comments from stakeholders who believed
the bill should provide greater detail relating to the type of information that
they might be required to provide, the format in which it might be required and
also the use to which that information may be put. Concern was also expressed
that, without greater clarity, it was difficult for stakeholders to determine
what resource imposition the requirement to provide information might have on
their organisation.
2.9
Perhaps greatest concern was raised by utility representative
organisations, which may be in part due to their not previously being required
to provide such information to the Department.
2.10
The Australasian Railway Association (ARA) was 'concerned about the
uncertainty ... of this legislation'.[9]
In particular, as the bill did not specify how the information was to be
provided, ARA believed this opened the possibility that utilities would be
asked to provide physical access to their infrastructure so that observations
of their infrastructure could be made for information purposes. ARA submitted
it was concerned about the safety of workers and the security of railway
operations. Although safety is carefully regulated by state legislation, ARA's
concern was that Commonwealth legislation retained primacy over state
legislation.
2.11
Water Services Association of Australia (WSAA) raised an identical
concern at their appearance before the committee when they were asked to expand
upon their reference to third-party access in their submission. Mr Claude Piccinin
stated concern that:
...the bill only dealt with the provision of information. It
was left unspoken what arrangements would be made in respect of actually
accessing our infrastructure.[10]
2.12
However, quite early in proceedings, the committee was able to clarify
on the record that the purpose of this bill was to require access to
information only; physical access to infrastructure assets and corridors was a
completely separate issue and not the subject of this amendment.
2.13
In their submission, Energy Networks Association (ENA) were concerned
regarding the lack of detail on the 'control procedures for the release of
information'[11]
to other parties, without which it would be difficult for them to gauge the
risk of any such release.
2.14
Giving evidence at the public hearing, Telstra stated their belief that
the scope of information required was rather broad:
...the 'language [of the bill] needs to be tightened up quite
significantly ... to make sure the information is strictly for the building of
the NBN and ... the type of information ... clearly specified.[12]
2.15
In continuation, Mr William Gallagher gave the example of the bill
currently referring to 'things ancillary to either the building of or the
provision of services over the NBN'[13]
as being purposes for which the information could be used. However, Mr
Gallagher moments later acknowledged that the current bill is an improvement on
the previous legislation, admitting that '...although we say it needs to be
tightened – [now] there is at least some attempt to contain the nature of the
information that can be requested.'[14]
Timelines for consultation and supply of information
2.16
Concerns were raised with the committee about the time allowed both for
consultations on any draft instrument requiring the provision of network
information and for the provision of the information itself.[15]
2.17
ENA considered the five day timeframe to be 'particularly onerous' on
energy network businesses, and, while recognising that this timeframe is
designed to be a 'safety-net' should commercially cooperative processes fail,
it noted there was no mention of proposed timeframes for these negotiations to
take place. Given the implementation timeframe for the NBN and the likelihood
that information would be requested in the near future, ENA considered that
there should be consultations between the government and energy network
businesses to 'mitigate the risk of being required to provide unavailable or
onerous information requests'.[16]
2.18
The WSAA considered that, while the five day consultation period would
be sufficient for providing information about recent assets and in relation to
metropolitan infrastructure, for legacy assets and regional water utilities,
two weeks would be more appropriate.[17]
2.19
WSAA also noted it could take even longer to provide advice on land and
easement availability because of the need to assess future infrastructure
requirements at the time of the request. In addition, while assets registers
contained information on existing infrastructure, information on works under
construction is located elsewhere, which would make accessing this information
more complex and time consuming.[18]
2.20
Integral Energy argued that the five day consultation timeframe should
be extended to fifteen days to give businesses a 'realistic opportunity' to
ensure information requested was both 'directly relevant' and 'capable of being
delivered', particularly given the potential civil penalty for failure to
comply.[19]
2.21
Similarly, Integral Energy argued that the minimum ten day timeframe for
providing information should be extended to twenty working days, noting that it
was 'unrealistic' to expect infrastructure businesses to have all the requested
information at hand and in the format required.[20]
2.22
The ARA concurred with the view that the consultation period on the
draft instrument and the time for the provision of network information should
be doubled.[21]
2.23
While acknowledging that the timeframe was still of concern to some
people, the Department considered that the increase from three to five days
allowed for comment on a draft instrument was a 'reasonable' extension.[22]
Further, there was an underlying assumption that by the time the point at which
consultations on an instrument is reached, commercial discussions already would
have taken place about the nature of the information being sought. The
Department also noted that the timeframe is the 'mandatory time frame' but this
would not 'preclude informal discussions about instruments as well.'[23]
2.24
With respect to the provision of information, the Department observed
that the ten day period was a minimum amount of time and that 'a longer period can
be provided.'[24]
2.25
The Department indicated that any extension to the proposed consultation
period would put pressure on its timeframes. A similar proposal to extend the
time for providing requested information would raise the same concern.[25]
Committee view
2.26
The committee notes that the time for consultation on a draft instrument
has been extended from three to five business days and that the time for
providing information is a minimum of ten business days.
2.27
Notwithstanding the concerns raised by submitters, the committee
considers that, given the discussions that are likely to have taken place about
the nature and format of the information required before the issuing of any
instrument, and the need to ensure the NBN Implementation Study is not unduly
delayed.
Compensation for provision of information
2.28
Four submissions raised concerns about the cost impost on utilities
required to provide information under the extended regime and proposed the bill
should require the government to provide compensation to cover reasonable costs
incurred.[26]
2.29
ENA considered that without knowing the level of detail and type of
information required, utilities would be unable to determine the cost of
providing the information, particularly in the timeframes proposed. ENA noted
that there is 'no discussion on the ability for an entity to recover or be
reimbursed for these costs.'[27]
2.30
Integral Energy concurred with other submissions that they should be
able to recover the full costs of providing requested information.[28]
Integral Energy observed that as the bill provides for a 'wide range of
possibilities as to the information' it was difficult to 'narrow down specific
costs as a result.'[29]
However, it expected to be reimbursed for the costs it incurred in supplying
information either voluntarily or compulsorily.[30]
2.31
The WSAA also expressed an expectation that its members would be
recompensed for the costs incurred in assembling, collating and providing
information in the form required.[31]
2.32
The ARA indicated that it believed the legislation should be amended to
include protections from 'unreasonable impacts on railways and unreasonable
costs'.[32]
2.33
When questioned on the costs incurred to provide information under the
RFP process, Telstra indicated that the costs were 'internal costs' such as
management and staff time in extracting the information from different
databases and systems. In relation to the current bill, Telstra had not
developed a position on whether suppliers of information should be recompensed
for doing so.[33]
2.34
The Department advised that the lack of an explicit compensation
provision in the legislation was a reflection of the nature of the regime
envisaged. There was the intention and preference to obtain information on a
voluntary, commercial basis and that 'decisions parties make between themselves
would be a matter for them to the extent that they would be compelled to
provide information as a last resort.'[34]
2.35
The Department advised that any payment for the provisions of
information from carriers and utilities to the Implementation Study on a
cooperative or commercial basis would be made from the budget for the NBN
implementation on the authority of a departmental delegate.[35]
Committee view
2.36
While the bill does not make compensation a requirement where
information is sought on a mandatory basis under Part 27A, the committee notes
that it is the government's intention to seek information on a cooperative and
commercial basis in the first instance. Were information to be sought on a
mandatory basis, the appropriateness of compensation would be a matter that might
then require further consideration.
Information security implications
2.37
Two main areas of information security that were raised with the
committee: one relating to the general use, disclosure, storage, handling and
destruction of any information provided under this bill; the other relating to
the potential implications for national security that the broad provision of
information may have.
General use, disclosure, storage,
handling and destruction of information
2.38
Overall the committee notes that there was a general willingness to
provide information voluntarily, provided stakeholders had confidence that
there would be adequate confidentiality and security measures for information
provided.
2.39
ENA submitted that the broadening of the definition of an entrusted
company officer ‘carries with it infrastructure security and commercial
implications, as well as possible risks', adding that:
This is also exacerbated by the fact that the businesses
appear to have no control over whom the authorised information officer chooses
to give the information to.[36]
2.40
ENA also stated that it would be ‘prudent’ if information automatically
became ‘protected network information’ as soon as it was received by the
authorised information officer, rather than wait until the officer had reviewed
it and provided a written undertaking to the fact. It was suggested that
creating greater confidence for businesses could subsequently promote a ‘freer
flow of information’.[37]
2.41
In commenting on the ability of the Australian Competition and Consumer
Commission (ACCC) to access the information, Integral Energy believed that the
bill did not clearly state the purpose for which the ACCC could gain that
access. Noting that the both ACCC and also its subsidiary, the Australian
Energy Regulator (AER), already have strong information gathering powers:
Integral Energy submits that the Bill should make it explicit
that the ACCC and ... AER, may not use that information for the purpose of
undertaking the economic regulation of essential infrastructure businesses.[38]
2.42
Mr Piccinin from WSAA also expressed his views quite categorically that,
in relation to the information provided, ‘[T]he security is not negotiable.’[39]
His submission was one example where concerns extended to the broad scope and
extent of availability of information being perceived as having potential
‘national security implications.’[40]
Concerns unfounded
2.43
In stark contrast to those views, Mr David Havyatt from Unwired
highlighted to the committee that the telecommunications regime as it currently
stands already provides ‘an extensive facilities access regime whereby carriers
are required to provide to each other information about their underground
infrastructure and towers’. The information being requested by this bill
‘could be requested by the ACCC or ACMA for the purpose of their regulatory
function’.
2.44
However, through a ‘quirk of drafting’[41],
the government itself is not permitted to ask for that same information for the
purposes of developing public policy relating to critical national
infrastructure such as the NBN, and consequently requires this amendment to do
so.
2.45
Mr Havyatt highlighted that there are ongoing relationships between
water and electricity utilities, the railways and the telcos, through the
common use of infrastructure and telecommunication services. His evidence also
negated the concerns for national security, stating that:
...a large amount of the information that people are claiming
is necessarily part of national security is actually physically available
already, be that in topographical maps, or just by physically sighting.[42]
Committee view
2.46
The committee acknowledges the concerns of stakeholders and the
necessity to provide them with the confidence that their information will be
dealt with the appropriate levels of security and confidentiality.
2.47
However the committee believes that both the existing measures under
Part 27A of the Act and those contained within the amendment provide
adequate measures for use, disclosure, storage, handling and destruction of
information provided to the authorised information officer. As clearly stated
by the minister in the Second Reading Speech:
The Bill imposes safeguards and limitations on the permitted
purposes for which information may be disclosed and used. ...
Provisions in Part 27A ... allow the Minister to make rules in
subordinate legislation about the storage, handling and destruction of network
information, which are intended to protect the confidentiality and security of
network information.[43]
2.48
Similarly, the committee draws attention to the fact that existing
penalty provisions for misuse of information are retained. Any breach of
non-disclosure prohibitions by an entrusted public official remains a criminal
offence under the Crimes Act 1914 and a similar breach by an entrusted
company officer would be a contravention of a civil penalty provision.
2.49
Despite comments that the government should make the instrument
available to the sectors for comment, the committee highlights that witnesses
stated that they were very happy[44]
with consultations they had recently had with the Department. In particular,
Mr Piccinin from WSAA commented on the provisions within instruments created
previously under Part 27A:
...in discussions with the department we were pointed in the
direction of the existing instrument with respect to telecommunications. They
said that that would be translated across to our infrastructure ... So long as
that is done we do not have a problem in respect to how [the instrument] would
handle the security aspect ...[45]
2.50
Finally, the committee notes that, when questioned about information
provided to the Department under the previous RFP requirements of Part 27A, and
the perception that proponents could now use that information to build their
own broadband network, the Department confirmed that:
Those proponents do not have the information any more ... They
have handed it back or they have destroyed it.[46]
2.51
The committee strongly believes that the existing provisions and those
in the proposed amendment contain appropriate security and confidentiality
provisions for stakeholders to have confidence in the information gathering
process.
Competitive neutrality
2.52
In its submission, the Business Council of Australia (BCA) expressed the
view that the government's decision to proceed with this legislation raised a
number of competitive neutrality issues that required further justification.
BCA submitted 'that information compulsorily acquired from a private business
in support of the NBN company under Part 27A will almost certainly be of
commercial value' and would therefore confer 'a competitive advantage on the
NBN company'.[47]
2.53
Telstra also expressed concern that the current drafting of the
description of information that may be collected under the regime is 'broad and
very uncertain' and could be interpreted to extend to 'business plans and other
information concerning the way in which a carrier intends to use its physical
network infrastructure commercially'. Disclosure of this kind of information
to the NBN company, Telstra argued, would 'raise serious issues of fairness and
competitive neutrality'.[48]
To mitigate this potential, Telstra proposed limiting the scope of the
information that may be required to be provided under the legislation.
2.54
However, on the issue of competitive neutrality, Unwired observed that
the current regulatory regime already provides for an extensive facilities
access regime whereby telecommunications carriers are able to access each
other's infrastructure and are required to provide information about their
infrastructure to other carriers.[49]
2.55
The Department agreed that the bill would need to cover information on
the location, physical and functional characteristics of network facilities as
proposed by Telstra, but indicated that the legislation was not limited to this
type of information. It advised, however, that it was not envisaged that the
kind of information detailed in Telstra's submission would be sought because of
commercial and competitive concerns. In terms of safeguards, the Department noted
that any request for information to be provided to the NBN company would need
to be via an instrument that would be subject to consultation and ultimately
disallowable.[50]
Splitting of bill
2.56
The Opposition raised the feasibility of splitting the bill to provide
that the current legislation only apply in respect of the Implementation Study
and that a separate bill be required should the need to provide information to
the NBN Company be established.
2.57
The Department advised that while the proposed regime does not have a
specific legislative trigger, it does require a decision to be made by the government
for information to be provided to the NBN Company.[51]
Committee view
2.58
The committee does not support the suggestion that the bill be split in
respect of its application to the Implementation Study and NBN Company, as it
would potentially unnecessarily delay the NBN process if it became clear
information should be provided to the NBN Company.
2.59
The committee notes that the parliament can make an in principle decision
that the NBN Company can be provided with access to information if it is found
to be appropriate and for the minister to exercise that judgment. The government
would need to make a conscious decision to provide information to the company.
2.60
The committee also notes that if it is appropriate to provide
information to the company, there will be strong and effective protections in
place. The NBN Company would not have the power to request information
directly itself, but would always have to request it through the Commonwealth.
Other issues raised in submissions
Privacy Impact Statement
2.61
In her submission to the Committee, the Privacy Commissioner suggested
that it was unclear whether the 'protected network information' to be disclosed
by carriers and utilities would include 'personal information' as defined by
section 6(1) of the Privacy Act 1988 and suggested that consideration be
given to undertaking a Privacy Impact Assessment (PIA).[52]
2.62
Noting that it is not envisaged to seek information of a personal nature
at this stage, the Department indicated that, as the bill provides a head of
power rather than the specific type of information that may be requested, it
would be more appropriate to determine whether a privacy impact assessment was
required once an instrument is prepared.[53]
Civil immunity concerns
2.63
In their submission, Telstra raised the issue of carriers and utilities
being ‘exposed to the possibility of liability’ as a result of complying with
the requirement to provide information. It was pointed out to the committee
that some records may be unintentionally and unknowingly inaccurate for a
variety of reasons.
2.64
Expanding on this issue before the committee, Mr Booth stated that
Telstra would always provide their information on a ‘best efforts basis', but
highlighted that their network has been deployed over several decades.
Consequently, ‘we could not categorically guarantee’ the accuracy of their
records, which ‘maybe incorrect, physically, or a road verge or a road [may
have] been moved’.[54]
2.65
Mr Piccinin from WSAA gave the example of over 400 water utilities in
Victoria having been amalgamated into 15 in recent years, stating that in the
process of such a wide scale rationalisation program, records of the
infrastructure could ‘get[s] lost along the way.’[55]
2.66
Similarly, Mr Hughes from the ARA commented that it would be
unreasonable if a business provided information 'in good faith', and was
penalised when that information was subsequently found to be inaccurate. [56]
2.67
When questioned by the committee on the issue of liability, the
Department acknowledged it as an issue of which they were highly aware when
drafting this amendment and also the existing Part 27A. The Department also
stated that information providers had the option of stating any limitations to
the information they provide. Although remaining sensitive to concerns, the
Department highlighted the necessity to balance these concerns with an incentive
for information providers 'to provide the best quality information' to
effectively inform the network planning processes. [57]
Concluding remarks
2.68
The committee notes that there is general support for the government’s
decision to deploy a FTTP broadband network to 90 per cent of Australian homes,
businesses and schools. The committee also notes that the objective of this
bill is to amend Part 27A of the Telecommunications Act 1994 to
facilitate the planning work of the Implementation Study and subsequently the
roll-out of the NBN.
2.69
The committee has been made aware of a range of concerns and issues
raised during the course of this inquiry. While noting that there could have
been greater sector involvement in the drafting of this bill, which may have
minimised these concerns, the committee acknowledges the time constraints under
which this bill was drafted and introduced by the Department. The committee is
also satisfied with the level of consultation with utilities and carries since
the bill was introduced into the Senate, and the undertaking by the Department
for ongoing consultation as instruments and/or rules are drafted in the future.
Recommendation
2.70
The Committee recommends that the bill be passed.
Senator Anne
McEwen
Committee Chair
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