Chapter 2 - Issues raised in the inquiry
2.1
The inquiry received a relatively small number of submissions, primarily
from telecommunications companies and government departments. Only one public submission
was received, from the Australian Telecommunications User Group (ATUG).
2.2
ATUG's submission expresses strong in-principle support for the bill,
but the majority of the submission focuses on making suggestions on the NBN
Request for Proposals (RFP) published by DBCDE rather than on the provision and
protection of protected network information.
2.3
The submission by Optus was generally supportive of the bill. Optus'
primary area of concern was the types of information that would need to be made
available to potential respondents to the RFP. The network information requirements
they identified showed broad agreement with the information DBCDE indicated the
government would be seeking in its submission.
2.4
Optus also indicated concern that the consultation period of three days
when the Minister for Broadband, Communications and the Digital Economy, the Hon.
Senator Stephen Conroy, is making a written instrument seeking designated
information is too short. They suggested it be extended to five days.
State government involvement
2.5
The South Australian Department of Further Education, Employment,
Science and Technology, the Western Australian Department of Industry and
Resources and the New South Wales Department of Commerce all proposed expanding
the definition of 'entrusted public official' to include state and territory
government officials.[1]
The purpose of this amendment would be to allow state government departments to
use network information obtained under the act to assist in the planing and
development of state broadband networks and initiatives.
2.6
DBCDE responded to this suggestion, stating that they regard the current
definition of entrusted public official as appropriate and noting (a) that the
focus of the proposed legislation is 'to facilitate the implementation of the
National Broadband Network' and (b) that the collection of network information
to facilitate network planning would need to be considered separately by government.[2]
State government officials involved in a consortium putting forward a bid under
the process would be able to receive information under the bill's definition of
'entrusted company officer'.
Issues raised by Telstra
2.7
Telstra, while supportive of an expeditious process for the NBN RFP
tender process, were concerned to balance the need for information provision
and administrative efficiency with national security and commercial risks that
could arise from the disclosure of sensitive commercial information.
2.8
Telstra's extensive submission proposed amendments to the bill. These were
all fundamentally intended to limit the likelihood of sensitive network information
being used for purposes other than the preparation of submissions for the
construction of a NBN as specified in the bill.
2.9
Telstra's proposed amendments would:
- limit the types of information required and what the information
could be used for;
- prevent disclosure of the information in bid submissions;
- increase a company's legal recourse if information is disclosed;
- restrict the number of individuals who have access to the
information; and
- mandate security and destruction requirements for the information.
Limits on type of information
2.10
Telstra proposed that the types of information able to be specified as
'designated information' under section 531C be better defined and more specific
and limited to 'the type, physical dimensions and general locality of existing
telecommunications networks and facilities'.[3]
2.11
The explanatory memorandum to the bill gives some guidance as to the
types of information likely to be required,[4]
and DBCDE's submission to the inquiry provides much greater detail on the
information likely to be requested. DBCDE's response to Telstra's submission
highlighted the fact that the bill has been designed to allow the minister
maximum flexibility in determining what information is required.[5]
Telstra's limited and non-specific definition does not appear to add much to
the bill.
Limits on use
2.12
Telstra's submission claimed that restricting what designated
information can be used for is as important as specifying to whom it can be
disclosed. Telstra notes that an entrusted company official who has been
provided information legally as specified in the bill is then technically free
to use that information for any other purpose providing they do not disclose
the information in the process. Telstra's position is in line with the intent
of the bill as outlined in the second reading speech, where it was stated that the
'information can only be used for the purposes of building a broadband
network.'[6]
An amendment specifying that information disclosed to a company official is to
be used only for the purposes for which it is disclosed may be reasonable, if
difficult to enforce.
2.13
DBCDE was concerned that the prohibition on an individual disclosing
information unless it is for a purpose provided in the bill would prevent its
meaningful use in other circumstances. Against this, however, should be
balanced the fact that any company developing a tender is likely to have a
substantial team with access to this information working to develop the tender.
Such a group would be able to use protected carrier information for other
purposes without further disclosing it.
2.14
Telstra also proposed amending paragraph 531G(2)(e) to limit additional
uses of the information by the government. The explanatory memorandum makes it
clear that the purpose of this paragraph is to increase flexibility in dealing
with unforseen circumstances and would be subject to senate scrutiny.[7]
DBCDE's submission highlights this need for flexibility. Amending the paragraph
would therefore defeat the purpose of including it.
Disclosure in bid submissions
2.15
Telstra objected to the provision allowing competitors to disclose
designated information in a bid submission and proposed that the paragraph be
narrowed to require any bid submission to preserve the confidentiality of the
protected carrier information.[8]
Given submitters have the ability to designate their own information as
confidential, this may be reasonable.
2.16
DBCDE's correspondence reiterated the rules for disclosure outlined in
the bill. The department may envisage the entire process as being confidential,
which would prevent the public disclosure of the information and limit it to
entrusted public officials assessing the submission. If this is the case, it
would probably satisfy Telstra's desire to protect the confidentiality of
sensitive network information. However, the committee is concerned that this be
clear.
Legal recourse if information is
disclosed
2.17
Telstra did not regard current provisions for compensation and
accountability as adequate. In its submission it sought:
- the removal of the requirement that a company authorised the
offence as a precondition for compensation;[9]
- the ability to pursue compensation against public officials and individual
entrusted company officers;[10]
- the right to seek injunctions preventing a potential breach; and
- a reporting regime which obliges an authorised information
officer to disclose the identity of all entrusted company officers.
Authorisation as a precondition for
compensation
2.18
Telstra's submission proposed removing the requirement for authorisation
before compensation when a carrier has suffered as a result of protected
carrier information being misused. The relevant provision of the bill requires
that compensation may be paid where:
...the Court is satisfied that the
company expressly, tacitly or impliedly authorised or permitted the
contravention...[11]
2.19
Telstra suggested this item be amended so that its effect would be to
attribute liability to a company where:
...the conduct of the entrusted
company officer resulting in a contravention of the bill is undertaken within
the scope of his or her employment or within his or her actual or apparent
authority.[12]
2.20
This proposal may have merit. Telstra's proposed amendment would seek to
make a company responsible for any inappropriate actions of an entrusted
company officer, while the original only allows compensation if the act was 'expressly,
tacitly or impliedly authorised or permitted' by a company. Telstra argued that
the standard of proof in the draft bill appears to be imported from the Criminal
Code, yet is being applied to a civil action.
2.21
Telstra pointed out that a court would be free to consider whether or
not an action was authorised by a company when determining a compensation
amount and the approach is consistent with the approach taken in the RFP for
the NBN.
2.22
DBCDE appeared to reject Telstra's proposal in part by suggesting that
Telstra's reference to 'actual or apparent authority' would risk excluding the
potential actions of consultants and advisors external to the company. However,
Telstra explicitly intended a revised wording that would include both employees
and consultants or advisors, as they refer to 'the scope of his or her
employment or within his or her actual or apparent authority' (emphasis
added).[13]
2.23
DBCDE's response did not seem otherwise to address this particular
proposal from Telstra to raise the standards of diligence for companies
receiving sensitive network information under the bill.
Public officials and individual
entrusted company officers
2.24
Entrusted public officials are subject to prosecution under the Crimes Act 1914
for disclosing protected carrier information and it would not be
appropriate to expose them to additional individual claims for compensation.
Entrusted company officers are another matter. If a company officer represents
a company with no significant assets, the aggrieved carrier might have no
effective right to compensation. DBCDE's response did not address this issue,
which requires a balance between a carrier's right to effective compensation
versus the potential for particular individuals to be targeted for intimidating
legal action.
Injunctions and a reporting regime
2.25
The right to seek injunctions is, in practice, unlikely to enhance the
security of protected carrier information and has the potential to disrupt the
rapid implementation of the bill. DBCDE's response identified the potential for
preventative injunctions to delay the preparation or assessment of proposals.
2.26
A reporting regime, also suggested by Telstra,[14]
would have no benefit except to enable an effective injunction process as the
identity of entrusted company officers can be established if a breach occurs. DBCDE's
response also identified the potential for such as regime to reveal information
regarding the internal structure of a company or consortium preparing a
proposal.
Restricted recipients and security
and destruction requirements
2.27
Telstra's final two areas of concern – restriction of recipients and
security and destruction requirements – appear unnecessary as amendments.
Provisions for these exist in the legislation in sectionss 531N and 531P and
can be specified by the minister making a legislative instrument. Carrier
consultation would be appropriate in such a circumstance and Telstra's
proposals may be appropriate for informing the development of such instruments.
DBCDE's response to the Telstra submission supported this view.
Committee views
2.28
The committee is supportive of a plan that facilitates the rapid
delivery of a NBN that makes high speed internet access available across Australia.
The committee supports policy objectives that will deliver the best possible
broadband future for Australians.
2.29
The committee understands some the suggestion made by some state
governments that network information obtained under the bill be made available
for other planning purposes, but the clear intent of the bill is to be a
limited piece of legislation aimed specifically at facilitating the NBN tender
process.
2.30
The committee notes Optus' suggestion that the consultation period be
extended. However, the submissions by DBCDE and Optus clearly indicate that the
types of information likely to be required are well understood, and both
Telstra and Optus have indicated they are willing to provide information on a
voluntary basis. As a result, it is unlikely that surprises or controversial
issues will arise, meaning the three-day period should be adequate.
2.31
There are three proposals in the Telstra submission that, on the face of
it, may have merit. These are:
- placing limits on the use of protected carrier information;
- requiring protected carrier information to be designated as
confidential in submissions; and
- relaxing the requirement that a company have authorised or
permitted the illegal actions of an entrusted company officer as a precondition
for compensation in the event of a carrier experiencing loss or damage.
2.32
It appears there is potential for amendments in these three areas to
increase protection for a carrier's network information without unduly impeding
the efficient operation of the bill or delaying the development of the NBN.
Recommendations
Recommendation 1
2.33
That the government consider amending the bill to limit the use of
protected carrier information to the purposes identified in the bill.
Recommendation 2
2.34
That the government consider amending the bill to require companies
submitting tenders to designate a carrier's protected network information as
confidential.
Recommendation 3
2.35
That the government consider amending paragraph 521L(1)(d) to relax the
requirement that a court be satisfied that a contravention was authorised or
permitted, and replace it with wording that conveys that the contravention was
committed in the context of an entrusted company officer's employment or
authority.
Recommendation 4
2.36
That, subject to consideration of the committee's report and
recommendations, the bill be passed.
Senator Anne
McEwen
Committee
Chair
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