SUBJECTS: Labor’s NBN Service Guarantee; national security and 5G technology.
GREG JENNETT: Michelle Rowland, the ALP's announced this complaints and penalties regime for the NBN. Can we start by defining what the problem is that you're trying to fix here. Is it the performance of the network as run by NBNCo or is it that end user experience, for want of a better description?
MICHELLE ROWLAND, SHADOW MINISTER FOR COMMUNICATIONS: Greg, it's actually an end-to-end problem that we have. We have a situation where consumer complaints have increased by 200 per cent over the NBN. We have a situation where, in a year, we've seen 80,000 missed technician appointments and we've also seen small business do its own survey and find that it costs some $9,000 for small businesses because of the NBN having downtime or not working properly.
JENNETT: So those statistics you cite there, are they faults that the NBNCo is responsible for is it all players in the system right through to the service provider?
ROWLAND: Well the fundamental issue here is that they stem from the performance of the NBN. But what we have done is gone out and listened to consumers, listened to small businesses, and what you touch on is precisely the issue that concerns them. One of the greatest sources of frustration is that when there is a fault with the NBN, they are often told, either by the retailer "no, that's not my problem, it's the NBN's problem as a wholesaler," or the NBN will say "no, that's a problem you need to take up with your retailer."
JENNETT: Well sometimes no-one will genuinely know, will they, until someone's come and diagnosed whether it's a faulty modem in your house or a network problem down the road?
ROWLAND: Precisely, and this is why this is such a huge cause of frustration for consumers and small businesses. So to deal with this, what we have determined is that we understand that the retailer has that contractual relationship with the end user customer. They are also responsible for reporting to the TIO and answering to them when complaints are raised, but the real issue has been 'well, when there is a problem, who does the NBN become accountable to?’ So what we have done is said we are going to have service standards at a wholesale level that can then be translated to a retail level, which can then be passed onto consumers.
JENNETT: And how does that differ to systems already in place? Because ACMA has a role in this space, as does the ACCC presently, so what is it that you're reinventing and redefining here?
ROWLAND: Well, it's not necessarily a re-invention. In fact, this is dealing with a fundamental root problem that hasn't been addressed and that is that consumers are not getting redress when they need it, they are actually being very frustrated by the lack of redress. So what we are seeking to do is establish an end-to-end process for which the ACCC will be responsible for oversight of this service level guarantee. We are going to have meaningful service levels. Currently, there are service standards at a wholesale level in the agreement that NBNCo has with retail providers but they are deficient in many ways. They don't have a remedy regime that is meaningful or penalties to that effect, and also they are done on an aggregate level so they don't take account of individual end-user complaints. And therefore we haven't seen those incentives that are necessary in order to deliver the best outcome for consumers.
JENNETT: What do you think might be an appropriate amount of time to be down on the network before penalties might kick in? Is it two weeks, is it three weeks? Does it depend where you live? What are the parameters that you're interested in setting here?
ROWLAND: Well of course ideally you would never want to have excessive amounts of downtime, and I think that as I have met consumers right around Australia, people are reasonable. They understand that look, sometimes things go wrong. But what really frustrates them is this lack of accountability. But Greg what we would be looking to do is to establish those design parameters in government with a responsible process that would need to include consultation with the ACCC as the responsible regulator, the NBN, but also other key stakeholders.
JENNETT: Is it only penalties that you're talking about or is there compensation back to the customer as an option in this regime?
ROWLAND: There is compensation back to the customer, but I should also make it clear that this is just as much about incentivising better behaviour at a wholesale level as it is about the penalty regime.
JENNETT: And would the NBNCo have to be given more money by government? I mean government owns that company, owns that network. How would they fund any penalties they had to pay?
ROWLAND: Well the NBN's impact that it will have in respect of this depends on its own response to those service levels. It also depends on the penalty amounts, how the penalties are applied and any compensations caps. But as I said, this is about also providing the right incentives for better performance standards and that greater accountability.
JENNETT: All right, now there is a bit happening in your portfolio area at the moment. I note that the government is sending signals it might be close to a decision on 5G networks and the role of Huawei, the Chinese-linked company. What's your view on whether they should have a role in the spine of that network?
ROWLAND: Well, we always take our advice on these matters from our security agencies and that's been a long-established bipartisan position. I think it's important to note that Huawei is embedded in some of our networks already, but that this issue that we are currently dealing with, and there has been some reporting and counter-reporting as you'll be well aware in the last few weeks, it's actually not novel in the telco space – that telcos have traditionally been very co-operative with government and with law enforcement agencies when it comes to protection of critical infrastructure. And what the laws, that will come into effect in the very near future, will do is essential codify what has largely been done on a voluntary basis, but a very responsible basis and very much a two-way street.
JENNETT: So, sorry, a company owned, as Singapore owns Optus, is that what you're referring to there? The fact that government stakes or sovereign wealth fund stakes in these telcos are common in the Australian network. Is that what you suggest?
ROWLAND: What I was more referring to was the current practices that are done when telcos acquire products –
JENNETT: To check on products? Yep.
ROWLAND: – or change equipment, there is usually that interaction with law enforcement agencies because, Greg, the telcos have very important roles to play in areas such as interception and access, in preventing crime and in ensuring law enforcement agencies do their job. And in Labor, we very much take our advice from those law enforcement agencies and will do so in this case for 5G as well.
JENNETT: All right, and who knows, we might even have a network reliable enough to carry the 2022 soccer World Cup! Michelle Rowland, thanks for your time.