I acknowledge the Traditional Owners of the land on which we meet and pay my respects to their Elders past and present.
I’m grateful for the opportunity to share my thoughts on some policy approaches and acknowledge the fact that affordability gaps exist, with a particular focus on broadband.
As I look at the depth and breadth of the presenters over these two days, I’m disappointed that I could not have set these aside completely in order to benefit from their wisdom. Having spent the past 18 months or so meeting with people in various parts of Australia, as well as my shared experience of broadband accessibility disappointments as a local resident in one of its fastest growing regions, my role in formulating alternative policy has reached a critical juncture. So this opportunity to articulate some principles and direction is most timely.
As a starting point, as we examine issues of affordability and accessibility, it is clear that the two are inexorably linked. But the interaction of one to the other can be quite distinguished when concentrating on different cohorts of consumers:
• those living remotely as well as regional;
• Indigenous, youth and people with a disability;
• postcode and housing status.
In other words, accessibility has many faces and experiences, none of which can nor should be negated as a “lifestyle choice”.
And just as there are many minds in attendance at this conference from which to draw, and the Labor Opposition’s current policy formulation process is well underway, you may well recognise some of your advocacy in these remarks.
By way of background, there are many experiences of my time as a Competition and Regulation lawyer which have caused me to pause and reflect on the challenge of affordability in a dynamic sector:
• I remember in the early 2000s being told that we would soon look at our phones more than we held them to our ears, incapable of comprehending how profound that prophecy would be.
• Devising a regulatory framework for the Palestinian National Authority, explaining what we take for granted in terms of the right competition and behavioural rules that should lead to consumer choice and benefits, but not really knowing whether or when they would work in that unique environment.
• As part of a project of options for universal access to remote areas of China, comparing the approaches in other jurisdictions and my first appreciation of the role played by mobile.
• Spending weeks in private and public consultations with operators in Malaysia assessing the Access List of declared services, at a time when the Government announced its decision for a high-speed broadband network to be rolled out.
• When in Cambodia undertaking an output-based aid project for fixed wireless access, we identified specific villages where a marginal investment could facilitate a positive business case for expanded rollout. The lead agency became perplexed when, a short time later, the incumbent operator commenced roll outs in almost precisely the same areas we had identified. It was difficult to explain that this was actually a good outcome.
• In late 2009, just months before I was elected to Parliament, I presented a conference paper on the importance of universal service in an NBN world. I recently searched for that Network Insight paper and noticed similar themes and titles discussed by many at this conference, reinforcing not only its importance but its complexity.
It was on this last occasion that I advocated a view born out of frustration: that if the electorate was going to understand (and in turn, support policies for) the transformational power of broadband and why this investment was critical, then government should develop pilot programs in schools (as a start) in postcodes of both high disadvantage and low broadband availability. I compared the accessibility of some outer regional parts of Australia to outer-western metropolitan Sydney, arguing that we were on the verge of having just as big a digital divide in our emerging suburbs as between metro and country areas.
I raise these preliminary comments because they provide a framework for the principles and challenges of communications affordability in an NBN environment which I have been examining and would like to share with you today.
While the usual disclaimers apply that these are my thoughts as Labor develops its policies in this area, I sincerely welcome your input.
Principles and challenges of affordability
I categorise these principles and challenges into 3 areas:
1. Choice will continue to drive competition and price, so what is the best way to facilitate choice?
2. If disruption is now permanent, how valid is any policy response?
3. Universal service, universal infrastructure, universal obligation, universal fund – they are terms of art that have one thing in common, an equity (or fairness) principle.
My conclusion reflects a prevalent theme which emerges in many of the submissions to the current Regional Telecommunications Review: that while the transition to an NBN world provides an opportune policy reform window, there is an exhaustion - stretching from Estens to Glasson to Sinclair - for reform. While I do believe there is an ongoing role for oversight reflected in the diligent and insightful process that has brought us this far, I would like to think that future conferences of this nature point to the Shiff tenure as the turning point which, paraphrasing what Paul Keating might have said, “brought the whole show together”.
I’ll make some brief remarks on these 3 aspects before turning to potential policy directions.
Choice, or the lack of it, has implications right through the layers of infrastructure and service delivery. Is it a point well-made by ACCAN in its submission to the Regional Telecommunications Review and prevalent throughout many others I have read.
Then of course aside from choice of provider, there are issues of technology choice and choice of infrastructure at a wholesale level. As argued in the submission by Swinburne University of Technology, for example, there are fundamental challenges to the primacy of choice presented by the current universal service regime:
“Much of the existing research indicates that Indigenous people living in remote Australia prefer mobile telephony and pre-paid mobile broadband. However, Australia’s Universal Obligation provides subsidies to the USO provider (Telstra) for STS and payphones only.” (at page 8)
Similarly, ACCAN’s submission highlights one of the potential downsides of mobile-specific subsidy schemes:
“In addressing (mobile) coverage it is important to also address competition. While increasing coverage will benefit consumers, limiting the potential providers available will result in monopoly markets”. (at page 20)
For me, the issue of lack of choice in broadband provision is an issue close to my heart and home.
This is Mr Peter Allsopp, a resident of the suburb of Acacia Gardens in my electorate that was established approximately 20 years ago. So not old, but not new by North-West Sydney growth sector comparisons. In this front page article from The Blacktown Sun on 8 September 2014, Mr Allsopp epitomises the choice and affordability conundrum facing metropolitan residents. It reads:
Twenty-five gigabytes doesn't last long in Peter Allsopp's household.
He is one of many Acacia Gardens residents frustrated by national broadband network delays.
Before last year's election, then opposition spokesman and now Communications Minister Malcolm Turnbull promised everyone would have access to the NBN by the end of 2016.
The timing as to when Mr Allsopp and neighbours in his street [will receive the NBN] has disappeared from the map on the NBN website.
Because they live in a blackspot, the only technology option accessible to the Allsopps is Wi-Fi.
It takes a fortnight for them to reach the 25-gigabyte monthly limit for which they're on a contract.
They are charged excessive amounts if they go over the limit.
"My oldest boy is in high school with another child starting next year," he said.
"We don't even have a tablet because we don't have the facilities to use it. We don't live 400 kilometres out in the bush. We live in the middle of Sydney and we don't have access to broadband.
"It disappoints me the minister can't answer a simple question as to when my family can join the rest of Sydney in the 21st century."
Even the recent announcement of new rollout areas, most likely to be FTTN in some neighbouring suburbs next year, Acacia Gardens was not included. This is a real-world consequence of lack of choice. As I recently noted in Parliament on 22 June:
“Let us have a look at some areas which do not have proper internet access in my area. Overall fixed broadband availability in suburbs like Glenwood, Acacia Gardens and Stanhope Gardens—what is available? Fibre-to-the-premises availability: not available. This is from the NBN's own website. HFC availability: not available. Fibre-to-the-node availability: not available. Overall fixed broadband quality: E, the worst category possible. And yet these are parts of the suburbs which have been taken off the map by this government. I am not surprised therefore that my constituents time and again raise this with me as the single biggest issue.”
I was also interested to note a report in the Sun Herald of 15 March 2015 entitled, “Broadband customers feel trapped and ripped off”.
This article noted that half of Australia’s broadband customers feel they are paying too much for their service, but a third are reluctant to investigate alternatives. The Canstar Blue survey found an average $70 a month spend for home broadband connections, and warned against consumers becoming locked into long term plans that don’t necessarily offer value for money.
There is only one certainty in politics: the inevitability of change.
So must disruption be seen as a constant, and its warning salient.
This is well-illustrated in David Ramli’s piece on 6 July, “Netflix popularity requires NBN price rethink, says iiNet boss”. To quote in part:
“iiNet chief executive David Buckingham says the massive popularity of internet services like Netflix means current broadband plans will not be sustainable under the national broadband network unless the company building it drastically slashes prices.
…the service consumes a huge amount of data because it offers constant streaming of high-definition videos to several devices simultaneously – an issue some claim would make it unaffordable under the NBN's current pricing arrangements.
"The whole industry is running around trying to deal with [Netflix]," Mr Buckingham told Fairfax Media. "We got 6-to-12 months' worth of [data] growth in six weeks. Nobody can forecast that. This is an unprecedented shift in the market that no one anticipated.
But he warned that all internet customers would face a financial crunch if they wanted to use Netflix once the NBN was complete, unless prices changed. This is despite NBN providing a 12.5 per cent discount to its wholesale charge in February.”
This is undoubtedly a significant challenge for NBN’s pricing structure. It’s also an enormous challenge for the Multi-Technology Mix. I note reports in News Limited overnight that Presto says Australia’s internet speeds are too slow for 4K content and lays blame at the MTM.
3. Equity or fairness
One of the most fundamental issues of fairness in broadband policy agenda is uniform wholesale pricing, which I will discuss in detail shortly. I did, however, want to make a brief point about postcode risk being alive.
On 19 August, the Australian Financial Review ran a piece entitled, “Top 100 postcodes at risk of mortgage default”. I was not particularly surprised to see postcode 2769 (The Ponds) on the list, a new suburb which had featured in similar previous analyses.
I was, however, surprised to see my own postcode 2768 (Glenwood, Parklea and Stanhope Gardens) at number 57. And I make the point that this correlation between cost of living and broadband inaccessibility is a live issue for residents in these suburbs. It is why I can report to you that it is the single biggest unsolicited issue on which I am called upon as a local member to intervene and advocate.
And as much as Minister Turnbull repeats himself that income determines accessibility, the very opposite is true for these suburbs. They are among the highest socio-economic suburbs in the electorate, yet they are subjected to the greatest unfairness of having limited or no reliable broadband access. The lack of broadband access is actually working the other way – it’s eroding their earning capacity, their participation as school students or small businesses, and their incomes.
Translating these principles into feasible policy directions
I’d like to turn to some of the potential policy directions for addressing the challenges I have noted. Again, many submissions to the Regional Telecommunications Review have articulated some useful suggestions.
1. New models for extending accessibility and affordability
Several submissions to the Regional Telecommunications Review are particularly instructive in terms of options that respond to need and deliver affordability. To sample a few:
“The needs of this sector [mobility and agriculture] are niche and best addressed by a new solution. The development of photovoltaic cells, batteries and light radio antennas suggest that wider coverage on a specific area could be cost effectively achieved by the deployment of a number of smaller cells configured to give maximum coverage.
“Instead of using old solutions for the task (more black spot programs) the Government could and should use an RFI process to invite carriers and/or equipment providers to propose a jointly funded project to develop and deliver a different model for mobile network expansion.” (DigEcon submission)
I was interested to note in the Telstra submission that it will be installing 250 Small Cells to deliver high speed 4G data services in some small country towns where suitable Telstra infrastructure is available. Even more interesting are the potential developments for Voice over LTE, in addition to data services.
At this point, I think it is important to pick up on one of the takeways from the ACCAN conference earlier this year on USO reform. There, Parliamentary Secretary Fletcher stated that the prospects of USO reform had become murkier by the arrangements put in place under the (then) Telecommunications Universal Service Management Agency.
Firstly, it is instructive to look at the background of TUSMA when we are discussing affordability issues in communications. The Explanatory Memorandum to the 2011 TUSMA Bill sets out the following policy rationale for TUSMA as an independent agency and articulates the need for change:
“The USO regulatory arrangements were designed for a market where there was a vertically integrated operator of a national telecommunications network. The rollout of the NBN will result in a fundamental change to the structure of the Australian telecommunications market as Telstra’s near ubiquitous national copper fixed line network will be progressively decommissioned as NBN Co rolls out its next generation fibre network nationally.
The NBN will be operated on a wholesale-only and equivalent basis. In an environment where all retail service providers are able, via the NBN, to offer high quality voice and high-speed broadband services nationally, it is appropriate that the model for delivering universal service and other public policy telecommunications outcomes be reformed to facilitate the competitive supply of universal service and other public policy telecommunications outcomes. A regime that enables competitive supply arrangements will be of benefit to consumers and industry as it promotes more innovative, effective and efficient service delivery arrangements.
In this regard, the service delivery arrangements for the USO will transition to a model that is similar to the current arrangements for the provision of the NRS, in that the Government will contract with service providers for the supply of these important services.”
The Opposition at the time supported the intention of the Bill, but expressed reservations about aspects of it. As we know, the Government has now rolled the functions of TUSMA into the Department of Communications as part of its deregulation agenda.
The question therefore becomes: has the TUSMA arrangement made reforms to accessibility and affordability impossible? Are the two mutually exclusive?
I think not, and the fact that the Parliamentary Secretary went on to discuss matters such as technology choice, to me, indicates the same. Probably where we differ is that I believe the case is being made as we speak, and is evidenced in the submissions to the Regional Telecommunications Review. That dialogue should therefore be focused on the options, some of which may well be outside or partially USO-related, but are relevant to matters of accessibility and affordability.
I also note Telstra’s statement in its submission that if Government chose to investigate potential different options, then subject to certain caveats it is open to working with Government and industry on alternatives.
Take a sample of the ongoing thought pieces in the Regional Telecommunications Review and beyond which demand the attention of policy-makers on such potential alternatives, including:
• the broadband-enabled universal health care model described by Mark Gregory, NetCare, which includes a free low-rate internet connection and access to all online government services;
• Reg Coutts’ recommendations for establishing a universal service fund with NBN as the Universal Infrastructure Provider and the Standard Communications Service Provider, the obligation on the NBN being to deliver a voice and broadband capability; and
• the potent advocacy by the Victorian Farmers’ Federation to re-direct some USO funds to other access projects such as mobile blackspots and satellite.
Vodafone’s submission probably deals with this issue on mobile as a driver of access and choice in most depth, a case that it has made for some time, including at the ACCAN forum earlier this year. Some of their compelling statistics include a comparison of the recent mobile blackspot funding program (initially $80 million + $20 million, with an additional $30 million in this year’s Budget) versus $253 million spent on copper wire for fixed line home phones in regional Australia. There’s also $44 million on payphones.
These funding comparisons are contrasted with 31 million active mobile subscriptions in Australia versus 9 million fixed line services.
There is something highly attractive to governments in the reform proposals set out in the Reg Coutts paper, which essentially argue that more can be done with the same, and more differently. Whether it be developing coverage extensions for large properties, providing mobile coverage or third party access to NBN fixed wireless towers (again, also contained in the Victorian Farmers Federation submission), remote residents may have a greater capacity to innovate to suit their needs.
It should be noted that the fixed wireless component, central to Labor’s NBN plan, has been widely recognised as infrastructure of excellent quality and an example of future-proofing. But I do think there has been a high expectation under this current government that more emphasis would have been given to developments in the fixed wireless area. For example, in answer to a question from Cathy McGowan MP (Indi) on 3 June 2014, Minister Turnbull replied:
“There are a number of areas—it is not the majority of the 2,700 towers that will be established for the NBN—where there is fixed wireless coverage under the NBN Co planned where there is no mobile phone coverage or mobile phone coverage of poor quality, or mobile phone coverage from only one of the three carriers. So yes, there are opportunities to do that. The NBN Co is also looking at a tower access product that will provide competitive backhaul from mobile phone towers to thereby reduce the cost of establishing new services in these areas via the mobile network operators. So we are looking at every way we can support this, but this is not a silver bullet.
The honourable member should understand…that the fixed wireless footprint is obviously focused on areas where there are premises to be serviced and that the black spots tend to occur in areas of thinner population.”
Also worth noting that the former Labor Government did actually flag this potential also in its response to the Sinclair Review:
“The NBN fixed wireless network provides an opportunity for carriers to expand their mobile phone coverage in certain locations across regional Australia by co-locating equipment in new towers built to support the network. The Government agrees that NBN Co and mobile carriers should work together to take advantage of the NBN fixed wireless towers to improve mobile coverage. The Government will seek advice from the NBN Co Board and the Australian Mobile Telecommunications Association on progress in this area. The Government will review the impact of the NBN fixed wireless towers on improving mobile coverage before considering the desirability of any further action.”
It is worth asking what progress has been made on this front, and whether it can be better facilitated through a focus on innovative delivery to service some of the needs noted above.
What has become clear to me in my engagement with communities over the past 18 months is threefold.
While government funding to assist infrastructure build in regional areas is welcomed, a Budget-to-Budget proposition is not ideal. This is also a reason why uniform wholesale pricing was crucial to Labor’s NBN. A longer-term proposition that allows communities to plan for their future and work towards some of those bespoke innovative solutions is preferable.
Raised expectations can result in deep disappointment. Thousands of sites were identified through the mobile blackspots process. Of course there would be those that missed out. You’ll be well aware that the political landscape is at the moment being fought out through the prism of a by-election on the other side of the country. Reportedly, one of the last acts of the late Don Randall was to publicly berate the Minister and his Parliamentary Secretary at the blackspots media announcement for the lack of towers announced for his electorate of Canning. I don’t know the veracity of this, I wasn’t there, but from my understanding of Mr Randall’s maverick nature and his fierce advocacy for his local constituents, I wouldn’t put it past him. His last speech in Parliament also happened to be about the NBN.
Thirdly, the leveraged funding amounts owed a great deal to funding commitments by a limited number of individual states and councils. At a time when governments at all levels are citing fierce fiscal constraints, not to mention talk of taxation changes, it is prudent to question whether those funding commitments will be replicated in future rounds.
2. Capitalise on what is working
One of the great success stories having a positive impact on broadband affordability is the uptake of WiFi hotspots.
The ACMA’s November 2014 research snapshot provides a useful summary of developments in this area. In the 12 months to June 2014, the use of WiFi hotspots grew by 21 per cent, with more than 3 million adult Australians gaining access via hotspots. There is a clear affordability incentive, as an alternative connection to capped allowance mobile plans, mitigating roaming charges, and more choice in going online.
Interestingly, WiFi users comprise a broad range of socioeconomic backgrounds, reflecting what the ACMA summarises as the broad profile of the average Australian internet user. The common thread is the complementarity of access mechanisms.
There is of course room for improvement, as Australia is placed in the middle of comparable countries such as the US and UK. But there is also clearly support for this Australian innovation that has been recognised by operators, non-communications businesses, and individual cities.
Again, there is innovative thinking in many of the submissions to the Regional Telecommunications Review and to follow up on the point noted above by DigEcon on innovative models, this time in terms of servicing remote communities, particularly indigenous communities:
“A localised communications solution that utilised WiFi capable mobile phones running voice over IP would provide a solution that provides local communications within the community without use of the satellite link and at the same time provide addressable devices for calls from outside the community and use in towns and cities.”
It is at this point that I compelled to do something unusual for politicians, and that is to admit a regret. In 2012 I had the opportunity to visit a number of communications providers and subject matter experts in the UK. One of them recounted their frustration with an attempt to partner with a local community to provide whole-of-town WiFi accessibility. Coming from a local government background as a Councillor on Blacktown City Council, this was a eureka moment for me – this would be the local pilot I had advocated for but never realised. If we provided it in our libraries and it was becoming an expectation on public transport, I could transform a whole town.
As it happened, Riverstone in the northern end of my electorate of Greenway was the site of first Sydney metro rollout of the NBN. It’s a town of character and characters; semi-rural with an older industrial precinct; fiercely proud of its history and home to many unsung local heroes; at least 4 schools either next to one another or in close proximity; hampered by decades of indecision about when and where to build a rail line overpass; on the cusp, for a long time it seemed, of new release housing development on its fringes, as opposed to the new suburbs such as The Ponds being born on its borders. Some pockets of serious disadvantage, even more pockets where the Labor vote has never been very friendly.
One day not long after this epiphany, the NBN Discovery Truck parked itself outside the small local shopping mall. I dropped by with one of the school groups and engaged with the NBN staff. The kids were intrigued but, as is the case with digital natives, it was seriously as if they had an expectation that we were telling them stuff they took for granted already.
Then I learned about some of the other feedback received on the NBN Discovery Truck. It ranged from regurgitating the latest anti-NBN rants from shock jocks and tabloid headlines that morning, to outright hostility, even what I interpreted as angry threats to the NBN staff.
And at a community meeting convened not long after to discuss how the 3 levels of government could work together to revitalise Riverstone, I suggested my Riverstone public WiFi plan. My suggestion didn’t even make it to the butcher’s paper shortlist of ideas.
My regret is this: we knew in Government that our NBN was a positive. It still is today. And it’s popular locally – I’ve got local businesses that have been feature pieces for choosing to relocate to Riverstone because of the NBN, it is a case study in superior technology as business incentivisation. But we got spooked by the angry vote and even translated it into the false narrative that older people don’t support the NBN.
I now know that’s false. Not only do they want it, they understand it. They understand the technology, that government and services are moving online and that affordability and accessibility are key. They even used these terms at a recent community NBN forum I conducted in the Newcastle suburb of Stockton. At 3pm on a Wednesday afternoon, it was standing room only at the local bowling club of predominantly senior citizens complaining that they were getting FTTN instead of a fibre connection to their homes. They don’t want to be left behind.
And I’d still like to make the main public areas of Riverstone WiFi-enabled, if any operators here are interested.
3. Debunking NBN unaffordability and new affordability challenges
One cannot examine the challenges of affordability in the NBN environment without debunking some of the Abbott Government’s claims on this issue.
We all know the claims of exorbitant price rises and unaffordability that we heard from Minister Turnbull when in Opposition and in the early days of this parliamentary term. In Question Time on March 3 last year, the Minister for Communications responded to a question on broadband affordability by saying:
“Thirty-two billion dollars additional investment is what we would see if we proceeded with Labor's (NBN) program. And, according to the strategic review, that would increase monthly broadband prices by 50 per cent to 80 per cent per month. The people on the Labor benches are mocking and scoffing; they do not care about the battlers they claim to represent.”
Really, a lecture from Malcolm Turnbull on battlers.
These claims of a 50 to 80 per cent price increase for internet usage over the NBN were trotted out regularly to justify the massive upheaval of the NBN and shift in delivery model from a largely FTTP rollout to the Multi-Technology Mix (MTM) rollout.
There’s only one problem - those figures are wrong.
These figures were derived from the much-lauded Strategic Review, a document we hear less and less about in recent times. This is a document which does not stand up to scrutiny and had only one objective, and that was to conform to a pre-conceived position. Tellingly, the Minister himself confirmed the flawed nature of this document in an interview with Crikey’s Josh Taylor just last week saying:
“The strategic review took six weeks. This plan (recent Corporate Plan) has taken a year…I think the truth is, prior to this work being completed we didn’t really know how much it was going to cost. So much of the input was questionable.” (25 August 2015)
The truth about the NBN under Labor is that it was more affordable than anything on offer before, with $29.95 per month entry fees without additional line rental.
Now on top of that, I would argue that the Coalition is making the NBN fundamentally unfair and we see this through the myriad of changes they have made to the project.
The Government has introduced a range of new NBN taxes and charges that will fall on young families and vulnerable Australians. At a time when housing has never been less affordable, Malcolm Turnbull has imposed a new connection tax on new homes, which could potentially add thousands of dollars to the cost of a new home. According to Urban Development Institute of Australia:
“It is highly inequitable to expect new home buyers to pay potentially thousands of dollars in additional fees to connect to the NBN, when existing households will receive the network for free.”
Under the Coalition, the quality of your broadband will be determined by your location. Australians on certain access technologies (copper) will pay the same for monthly internet access as those on world-class broadband (fibre). Australians who live in the copper footprint, including small businesses, will also be slugged up to tens of thousands of dollars if they want to upgrade to reliable, superfast fibre to the premises.
I don’t just raise these issues to correct any record. The fact is, one of the great affordability tenets of the NBN has effectively been plundered under this Government’s approach over the past 2 years, leaving open a serious question as to how it can be remedied: namely, uniform wholesale pricing.
Time and again this is an issue which I raise in Parliamentary debates, for which there is clearly discomfort for rural and regional Government members about its impact, and its equity basis for ending the digital divide. Just as one example, on 16 March 2015 in a debate about regional small business and the NBN, I did not need to look far for criticism:
We will start with Nationals Senator Barry O'Sullivan who, in Queensland Country Life in November 2014, highlighted his severe frustration with the government's lack of rollout and the lack of attention being paid to rural Queensland. The article says:
Mr O'Sullivan saw the gaps in the government's highly touted NBN scheme while touring far-western Queensland earlier this month.
"It's a shame on our nation," Mr O'Sullivan said.
"I'm embarrassed to be a part of a party whose government would allow this to continue.
"I think Malcolm should roll his swag out and run his ministry from out here for a month and then I think Malcolm will change his opinion.
"Let's see how he goes and hope that he doesn't need a phone service or internet, and he'll want to hope he doesn't need medical services."
The article went on to say:
Mr O'Sullivan said implementing the technology on an area-by-area basis was harming rural Australians' ability to compete in the global marketplace.
I will get back to that in a moment. But it is interesting that the article also ended by saying that Mr O'Sullivan:
… believed everyday Australians would see the unfairness in the gap between city and country infrastructure.
"The people of inland Australia feel abandoned by Canberra. They deserve better," he said.
Related to this of course there is the issue of the “broadband entrepreneur levy”, which my commentary in January this year opened with a quick quiz of who said this:
"We say that if broadband services are going to be provided in the bush - and they should be - and they cannot be provided on a commercial basis then the subsidy should be absolutely explicit, and it should come out of the budget. There is no reason to impose higher telecommunications charges on people in urban and metropolitan Australia to cross-subsidise the bush."
Yes, the individual who advocated subsidising rural broadband rollout from consolidated revenue and derided imposing a levy on metro cherry pickers was none other than Malcolm Turnbull (1 March 2011).
As I further noted:
“…the TPG shambles exposes his policy vacuum when it comes to the digital divide. Labor’s NBN had a solid policy foundation – disinfect the impact of vertical integration at the retail level by offering a wholesale-only product at a uniform price, irrespective of where all Australians live or work. Uniform national wholesale pricing was the grail, delivering services and competition to areas where infrastructure-based competition had clearly failed.”
I feel very strongly that an incoming Labor Government must pick up on this fundamental tenet of equitable wholesale access, because it will continue to be significant determining factor on affordability (or unaffordability) based on geography. How this can be achieved will to a large extent depend upon when Labor is re-elected and the state of the multi-technology mix at that time. I welcome your input on whether you agree and how this can be achieved.
I genuinely believe that there are policy options – current and alternative – that can have a direct positive impact on communications affordability in an NBN environment.
After the 2013 election I sat down with one of my former bosses from my lawyer years and asked where he thought were the big policy challenges for Labor in Opposition, apart from the bleeding obvious. He noted that there was much talk in the space about transitioning to an NBN world, but not a lot of appetite for deep and fundamental reform. He saw a big risk in focusing on what he viewed as “tinkering around the edges” with regulatory repeal (just about all of which in the Communications portfolio has been waved through without great amendment and little specific debate). The big fish would be issues like expectations and obligations under the standard telephone service.
Of course he’s right. There are some significant decisions to be made about reform and responding to need. The extent to which that is piecemeal or responsive to future recommendations arising the Regional Telecommunications Review is the real question for policy-makers. Otherwise, we are going to have a Government that continues to blame its predecessors and I’m just going to be getting up in Parliament lamenting lost opportunities, such as the occasion in March this year on questions of broadband accessibility and affordability:
“I want to make a few comments about the notion that the Libs and the Nats think they are the bastion of rural and regional communications and that they are the best friends of the people of Indi when it comes to regional communications, because the evidence shows that they are plainly not. You only have to look at the doyen of conservative telecommunications economics, Henry Ergas. Henry Ergas is no friend of ours, but he is a mate of Minister Turnbull's. In his book, Wrong Number: Resolving Australia's Telecommunications Impasse, he notes $3 billion frittered away by the coalition under John Howard—$3 billion. He writes:
These direct 'command and control' regulations have been paralleled by other interventions, often lacking in transparency and accountability … Thus, since 1997, over $3 billion (at 2007 prices) of taxpayers' money has been appropriated to schemes aimed at promoting the availability of use of telecommunications, mainly in non-metropolitan areas.
It goes on. It refers to the Communications Fund. It gives line items: 'Mobile Connect' and 'Clever Networks.' What does that equate to? It equates to $3 billion wasted under John Howard while the convergence debate came and went, and here we still are today talking about basic voice accessibility in black spots.”
In an age where big data assumes connectivity, where big data is actually being utilised to assist good, evidence-based policy making, I do believe we need to not only listen to consumers and deliver what they need in terms of some of these basic accessibility matters – we also need to deliver mechanisms for forward planning and certainty. Some of this will involve righting some policy wrongs, but it will also require new thinking in areas we have yet to tread.
Not only do I believe we need to aim higher than policies which catch up the have-nots with the haves, governments need to give a reason to believe in them. Rather than a trite and abstract statement, we need only to look at a most relevant recent example to find how decision-makers undermine this belief.
Around a year ago, I was approached by representatives of Barcoo and Diamantina Shires in outback Queensland lobbying for a regional fibre optic network link. They were friendly and genuine people, I was happy to make representations to the Minister and didn’t think a great deal more about it. But when I saw the Prime Minister and the Nationals leader were making a visit to the area in May, I thought: good on those Shires, I didn’t think they’d get there but they’ve proven me wrong. The headline in Queensland Country Life on 14 May read, “Optic fibre win for far west QLD”. There was a handshake deal for contributions from local and State governments of $2 million and $5.25 million respectively, with $7 million in Federal funding. Local MP and Deputy Speaker, Bruce Scott, was quoted in the article as, “…an eyewitness to the handshake and was nearly as jubilant as the Mayors on the day”.
But then, as reported on 7.30 only last week, that’s where the jubilation ends:
“Word of the handshake agreement spread fast throughout Birdsville and beyond. Within a month, Telstra had written to the Diamantina and Barcoo Shire councils promising mobile and internet data speeds equivalent to those in metropolitan Australia. Telstra also provided a detailed timeline for the construction and installation of fibre optic cabling in the region, with the project due to be completed in July next year.
But just weeks after pledging the money, the Prime Minister wrote to both councils informing them the deal was off.
TONY ABBOTT, PRIME MINISTER (letter, male voiceover): "Since our conversation at Longreach in May, I have been advised that the NBN is scheduled to commence its high speed satellite service in the second quarter of 2016. On this basis, I suggest that it might be best to reassess the need for this in about 12 months' time."
There are more than the consequences of a broken handshake at stake here in long-term, yet agile, policy responses to access and affordability. I hope I can continue to engage with ACCAN and yourselves as thought leaders in this area as Labor formulates its policies going forward.