Joint with Stephen Jones MP, Shadow Minister for Regional Communications.
SUBJECTS: Higher prices for regional households under Malcolm Turnbull’s second-rate NBN, Labor’s NBN Service Guarantee.
MICHELLE ROWLAND, SHADOW MINISTER FOR COMMUNICATIONS: One of the primary drivers for Labor initiating the National Broadband Network was bridging the digital divide. Under Malcolm Turnbull that divide is getting worse. Last night we learnt that NBNCo is going to be introducing new wholesale pricing bundles and they will mean the following: if you are a customer in a metropolitan area on a fixed line service, the wholesale rate that will be applied will be $45, however if you live in a rural or regional area and are on the Fixed Wireless network, that price will be $65. A $20 price differential based on where you live and the technology you are utilising.
For all Malcolm Turnbull’s talk about engineering and economics and being technologically agnostic, one thing is clear: the multi-technology mess he has created is costing regional Australians. Regional Australians are going to be slugged under this new pricing model which comes into effect next week. Labor has been prosecuting this case, we led the questioning last night, and I will hand over to Stephen Jones who was one of those people on Labor’s side doing just that.
STEPHEN JONES, SHADOW MINISTER FOR REGIONAL COMMUNICATIONS: Thank you Michelle, good to be here. Malcolm Turnbull has been running around the country for the last few months talking about cost of living and power prices, something which he doesn’t have a direct influence over. He does have a direct influence over what people pay for their phone and internet bills, and we learnt last night that regional consumers are going to be slugged $20 a month, that’s $240 a year for accessing the same service as people in the city. Malcolm Turnbull, in Point Piper is going to be getting the same service as somebody who is living in regional Australia for $20 less a month.
It’s not good enough, the government has got to knock this on the head and the National Party have got to rise up. The National Party have got to stand up for the people that they represent. The Deputy Prime Minister in his own electorate of Riverina has over 17,000 households that are going to be impacted by this $20 a month fee hike on their NBN and phone services. It is time for the National Party to represent the people who sent them here to Parliament. This cannot proceed; it has to be knocked on the head.
JOURNALIST: Stephen Jones if this is the position of the Labor Party and this is strongly how you feel, then why don’t you run serious Labor Candidates in all of these regional seats where you say that there is injustice happening for these customers? At the moment, what alternative do lots of people living in these electorates have?
JONES: Well let me tell you about a seat that I know very, very well, and that’s the seat of Gilmore –
JOURNALIST: And I understand that’s a marginal seat that you guys focus on, but there are a lot of other ones where you don’t run serious candidates. They are ALP membership who perhaps don’t even have career experience or knowledge of how to run in politics. In New England for example there has been a history of not running a serious candidate, why doesn’t the Labor Party put its money where its mouth is?
JONES: We will have serious candidates in all of our regional seats throughout the country. I can go from Leichhardt in the north down to Hobart in the south and right across the west and go through all of our candidates. All first rate people and all of them will be campaigning on the fact that under Malcolm Turnbull and his failed NBN broadband they are going to get a worse service, they are going to be paying more for less. Now we know it is $20 a month more, for getting an inferior service. It’s not good enough, the government has got to knock this on the head, the National Party has got to stand up, represent the people that send them here to Canberra and if they don’t, their seats are going to be in great risk at the next election from all of those excellent candidates.
JOURNALIST: So NBNCo’s logic for this would be to keep it within that $50 billion funding allowance. They’ve obviously seen that this is one way to do it. What would Labor do in power? Would you bring up the cap? Or would allow more money for NBN or would you dip right down on the value of the investment?
ROWLAND: The reality right now is that the economics of the NBN are in an utter shambles. We know that the results are going to be released today, we’ve got the Corporate Plan coming out later this month, so Labor is informing itself about what the current situation is. We have been very clear, for example on the issue of the Regional Broadband Levy that the government has finally brought on for debate, we want to ensure that the incidence of that and the impact is minimised as much as possible. It is highly regrettable that that has happened.
Labor is working on a number of initiatives in this area as we formulate our policies. As you can appreciate, this is the way in which we get this information, through committees such as this and through the estimates process. So we are being as fully informed as possible about this situation, but I think we need to come back to the principle. One thing is clear: under Labor we had uniform wholesale pricing. The whole point of that was, it doesn’t matter where you live or work in Australia, you will not be disadvantaged. That has been turned on its head. That has gone out the window under Malcolm Turnbull.
The economics of the NBN are an utter shambles and all we get from this government, all we get is spin. Not a focus on the consumer, not a focus on ensuring access and equity but these sorts of regressive measures that will mean people in rural and regional areas will suffer compared to their city counterparts.
JOURNALIST: Specifically how will you force NBN not to charge more in Fixed Wireless?
ROWLAND: Well right now that is a matter for the government. And every National Party MP and every regional MP on the government’s side should be beating down the door, that the Prime Minister intervenes and makes sure this doesn’t happen. This is scheduled to happen on Monday. Now if these people actually cared about their local communities, if they actually wanted to ensure that digital divide was obliterated, they would ensure that this does not go ahead. A $20 extra slug simply for living in a rural or regional area and accessing by Fixed Wireless. This shows everything about the priorities of Malcolm Turnbull. He knows the cost of everything, and the value of nothing, and he has no values when it comes to issues of bridging the digital divide and ensuring access and equity when it comes to broadband.
JOURNALIST: Critics might say this press conference is a bit disingenuous. Your Labor policy was also going to include Fixed Wireless, it’s a different technology. Wouldn't you say that the government and the NBN is trying to get the best value out of the infrastructure they've got to deliver a service that acceptable to as many Australians as possible?
ROWLAND: Well, the point is this. We had a Fibre to the Premises model for the vast majority of Australians - 93%, the remaining 7% to be satisfied by Fixed Wireless and satellite. We always had uniform wholesale pricing as our mantra. We always had that as part of Labor Party policy. Under Malcolm Turnbull's failed multi-technology mix the economics of the NBN are now a mess. And even a short while ago, we had NBNCo representatives coming out and saying ‘oh well this is the reality, this is the reality of living in a rural and regional area.’ The whole point of Labor's National Broadband Network was that it did not matter where you lived or worked in Australia.
JONES: I want to make an additional comment on that. Let me give you an example which explains the absurdity of this. In a place like Pitt Town, Hawkesbury, half the town which receives its broadband on a fixed line service, the other half of the town, literally across the road, receives its broadband on a Fixed Wireless service. They didn't get a choice on whether their houses, their businesses were connected by wireless or by a fixed line service but now as a result of this decision they had no choice in, they are going to be slugged an extra $20 a month. Nobody can say that it's fair if your house is on that side of the road you're paying $20 a month more, you're paying $65 wholesale for the same broadband service as somebody who is living on the other side of the road. I dare anyone to stand up and say that that is fair and reasonable. It simply is not.
JOURNALIST: So this pricing model is effectively based on Labor's policy of having a wholesale charge and a bandwidth charge. Is it time now to say the bandwidth charge was a bad idea? Because that seems to be one of the biggest issues with the NBN.
ROWLAND: Well the only thing that's a bad idea here is that the economics of the NBN have become busted under this multi-technology mix. We wouldn't need to be looking at this whole issue of restructuring prices in this way if we had stuck to the original plan. Now we have been calling for pricing reform in this area for quite some time. We were pleased that there was finally action on this late last year and that pricing structure was revised. But the reality is this: the only reason why we have this current situation is because Malcolm Turnbull's multi-technology mix has failed, and that has led to the situation we're in today.
JOURNALIST: The NBNCo has been very specific about the dollar figure that would require the minimum speed on Fixed Wireless to be increased from 6Mbps to 12Mbps. That's $1 billion they've said is required. Can you say now that Labor rules out finding that $1 billion ahead of the next election?
ROWLAND: We are currently formulating our policy in this area. The one thing I can say categorically is we are not going to be blaming people for where they live or for using broadband in regional areas. You know, what you described that came from NBNCo, I'll say two things about that. The first is the congestion issues that were raised, what did they do, they said 'oh this is thanks to high usage from people like heavy use gamers' and pointing the finger at consumers. And secondly, we had NBNCo actually saying they were going to have these upgrades to Fixed Wireless, and then come out and say sometime later 'oh no, we killed it, it was not economical'. What I can say to Australians is that Labor understands that it shouldn't matter where you live or work in Australia: you have a right to affordable, accessible broadband and should not be penalised for where you live in Australia and you should not have to cop this $20 extra slug simply for being on the Fixed Wireless network.
JONES: I think it’s also true, Michelle, that there was always an assumption that there was going to be a cross-subsidy between some of the more commercial areas to those that are not as commercial in the NBN network. It was our assumption, we thought it was the government's assumption. In fact they've got a bill, 15 metres that way, they've got a bill in the Senate today which is built on the assumption of cross subsidisation between one part of the network and the other part of the network but now we learn that is being thrown out the window because, in addition to that, they're going to slug these regional customers $20 a month more. It's not fair.
JOURNALIST: Just, finally, you actually haven't told us anything about what Labor's going to do if you win power at the next election. Is there anything that's new today in response to this?
JONES: Michelle's going to have something to say about this in a tick, but before I do, our job between now and Monday is to ensure that every regional MP, every National Party MP rises up, beats a path to the Prime Minister's door and says 'knock this on the head'. We will be in a position where we don't have to face this problem if the government does the right thing by regional consumers and knocks this on the head.
ROWLAND: We oppose this. We think that this is wrong. We thing that this is unfair and it's for the government to come out and explain what it's doing. And look, Labor has made several announcements in the area of NBN policy. We announced only recently our service guarantee. Our service guarantee to ensure that NBN is more accountable to retailers so they can be more accountable to consumers, a proposition that has been roundly welcomed by the industry, also by small business who see this as necessary. This government should come around and support that service level guarantee.
We've also made it very clear for some time now that we acknowledge that this government is not going to proceed with a full Fibre to the Premises model. They have made that very clear, but what we have also made clear is that it is economically and technologically feasible, as far as possible instead of rolling out copper to roll out fibre as close as possible to people's premises, to take fibre to the curb. Now we announced that early last year and the government, it's pleasing to see, that NBNCo have actually followed that and are starting to rollout Fibre to the Curb.So we are doing what we can now because, quite frankly, the rollout will be so advanced by the time of the next election, so much design and construction put in place, that Labor will have to deal with what we have and the realities on the ground. But we have made it very clear that we will not tolerate this extra $20 slug on rural and regional consumers and it is for the government to make a decision today about this.
JOURNALIST: Does that mean a write down? Does that mean the NBN has to be written down, the value of it, and brought on to budget? Because how are you going to fund it essentially?
ROWLAND: Well, the government has repeatedly ruled out the prospect of a write down. We have said that we need to be informed about all the circumstances around that. We've also made it very clear, and people need to understand this, you don't simply click your fingers and say 'I hereby write you down', there needs to be some sort of trigger in this. Pricing is one of the most obvious ones but this is one that the government is refusing to deal with. We've even had industry people say 'well look the government isn't prepared to confront this, what do they think the market is going to do'. So the government is burying its head in the sand, not only on that issue and confronting the horrific economics of the NBN as they exist today but in the meantime slugging rural and regional consumers in the most unfair way.
JOURNALIST: Just one quick comment on the NBN results today. Can you preview those? What do you expect, and you know, specifically about the revenue figures?
ROWLAND: Well they will be coming out shortly so we'll be watching those closely as well.