ADDRESS TO COMMSDAY MELBOURNE CONGRESS

SPEECH - ADDRESS TO COMMSDAY MELBOURNE CONGRESS - THURSDAY, 10 OCTOBER 2019

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I wish to begin by acknowledging the traditional owners of this land, and I pay my respects to their elders past and present.

It is a pleasure to be here today and I thank Graeme Lynch and CommsDay for the invitation.

I want to start by offering a few reflections on the recent election.

In May, Labor lost an election which many thought we would win.

There is no hiding from that fact.

It was a very difficult loss, but we are now between 18 and 30 months away from the next election.

Labor is taking the time to reflect and learn from what has happened.

And once we have gone through that process, our sights will be firmly set on the future.

I don’t intend to dissect reasons for the election loss here today.

What I will say is we have a hard, but achievable, task ahead of us.

To give ourselves the best shot, we will need to be a strong, disciplined and determined Opposition.

We will need to be creative and ambitious in our vision for the country, while displaying the pragmatism the collective public conscience seeks in times of uncertainty.

It will also be important to remain true to our values — while finding new ways of harnessing them to advance aspiration and better the lives of working people.

As our Shadow Treasurer Dr Jim Chalmers recently put it – to leave nobody behind, to hold nobody back, and always with the view to move the country forward.

In taking on this challenge, Labor is very fortunate to have Anthony Albanese as its leader.

I have known Anthony for nearly 30 years.

He is a man of intellect and decency.

As a former Communications Minister, and someone keenly aware of the importance of technology in shaping the future - Anthony understands the important role this sector plays in our economic, social and cultural progress.

A central theme of what I wish to cover today will be the importance of objectives in guiding coherent policy.

I will argue this Government has not presented a proper plan for the sector because many of its objectives have been missing, contradictory or misdirected to begin with.

Its direction on competition policy and spectrum reform has been either contradictory or unreliable.

Action on addressing digital inclusion or safeguarding consumers has been either lacking or too slow.

A coordinated and joined-up roadmap is yet to be seen.

As a result, key reforms have stalled, regulators have stepped in, and the industry doesn’t have the certainty it needs.

If Australia wants to avoid missing out on the promise of the digital economy, we need to do better — and government does have an important role to play.

What problems do we want competition policy to address?

I am going to open this section with a focus on competition policy and the proposed TPG-Vodafone merger.

I want to open on this topic because I feel there ought to be a more direct conversation about the number of operators and what that could mean for future investment.

In my speech to CommsDay last October, I made the point that it is often tempting to pronounce oneself in favour of pure competition — to declare that the more competitors you have, the healthier any given industry will be.[1]

However, this is often an overly simplistic view of what is a more complex world.

It is not always the number of competitors, but the right type of competition that is critical.

In recent years a debate has re-emerged about the tension between profit margins and future investment.

Across the industry, various players, including NBNCo, have flagged that reduced cash flows and weakened balanced sheets have implications for future investment and, by extension, the quality of our networks.

I believe these concerns warrant careful consideration.

The proposed merger between Vodafone and TPG is a flash point for this discussion.

When we talk about market design it helps to start with a simple question: what problem do we want to solve?

This presupposes of course the problem we identify is one which actually needs solving.

As Shadow Communications Minister, and holder of a marginal seat in Western Sydney, I spend a fair bit of time listening to people from all walks of life.

So the first contribution I want to make to this discussion is to share the feedback I get from members of the community and how this indirectly relates to debates about competition and pricing.

As a starting point, no-one comes up to me raising concerns about mobile prices.

And to be fair – why would they?

The Australian mobile market is delivering good value and choice for consumers.

Our mobile networks are ranked fourth in the world,[2] and mobile prices, in real terms, have declined over the past decade.[3]

On the other hand, many people want to speak about network quality.

The quality of fixed-line technology which runs to their home.

The availability and quality of mobile coverage in their regional or outer suburban community.

According to the ABS, there are also over 2 million Australians who do not use the internet at home, and affordability is among one of their key considerations.[4]

In this regard, I consider one of the more useful objectives of 5G competition is to make entry-level home broadband prices, with decent data allowances, more affordable.

I made this point during several speeches in the last term of Parliament.[5][6]

To do this, wireless networks will need to support growing data consumption without raising prices.

If the industry doesn’t have optimal scale, infrastructure synergies, or balance sheets capable of delivering ongoing investment, these networks may not be able to remain cost competitive if they want to maintain a standard of quality.

The NBN fixed-wireless network is a case study in point.

In addition to broadband affordability, I believe the other — and arguably the key objective — is for competition policy, deployment reform and spectrum settings to play a coordinated role in nurturing the next-generation of Australia’s mobile networks to be among the best in the world.

This has to be a priority given how critical machine-to-machine connectivity will be for national productivity in areas such as autonomous transport, agriculture and manufacturing.

It is arguably the next frontier of economic growth.

Clearly in this context, economies of scale, ubiquity of coverage, and the technical efficiency of how we divide up spectrum are critical considerations.

If you accept the two objectives I have presented as higher-order objectives — and I want to emphasise the if — it is sensible to ask: what type of mobile industry is best placed to deliver these objectives?

Would a fourth Australian mobile operator help? Or would it make it more difficult?

In my former life as a telecommunications lawyer, my colleagues and I once found ourselves grappling with similar questions in Hong Kong.

It was there, some 15 years ago, that I learned: more competitors does not necessarily equate to more competition.

Out of respect for the ACCC and the proceedings which are underway, I will limit what I say here today, but I have wanted to place some views on the record nonetheless.

The key point I want to make is quality plays an important role in what the Australian public wants.

It will also play a critical role in what our future industrial-digital economy needs.

Personally, I’m not particularly absorbed by the question of whether or not a company can or will build Australia’s fourth mobile network.

The question I’m more concerned with is: would it help? And what does it mean over the long-term?

The risk we might run is additional mobile operators increasing the choice consumers and businesses have — but among a range of lower quality networks.

This might not be the choice the economy is looking for, and it might not be the choice the economy needs.

Government says one thing, does another

This brings me to a broader set of observations.

In the past six years we’ve had the Vertigan Review and the ACCC’s comprehensive market study into the communications sector. Yet when I ask many industry stakeholders what their understanding is of the Government’s competition objectives, they genuinely don’t seem to know.

And who could blame them.

Just last month, in a speech to CEDA, the Minister was quoted as saying the following in response to a question about the NBN:
“We are going to need to rely on and boost competition to make sure that our fixed networks continue to upgrade and stay in tune with world developments.”[7]
This is the same Government which — as we speak — wants to introduce a $7 to $8 per month broadband levy whose specific purpose is to prevent fixed-line competition with the NBN.[8]

At least Labor has openly said we don’t want TPG cherry picking inner city areas.

We afford industry the respect of taking positions that are consistent with what we say.

In that same speech, the Minister went on to declare the Morrison Government now considers serving the enterprise market to be — and I quote: “a core part of the [NBN] company’s mission.”[9]

This is interesting in light of the views the now Minister expressed in Opposition at a time when NBN wanted to deploy fibre to schools. In 2012, the Minister said:
“One of the many justifications cited for the NBN is to connect schools around the country to fibre optic cable.
But when you look into it a bit more deeply, it turns out that connecting schools to high speed broadband is not a good justification for the NBN.[10]
On whether this would improve speed and choice the Minister continued:
NBN will do nothing to solve that problem; instead it may well make it worse, because the NBN will dominate the future telecommunications market to an even greater extent than Telstra does today.
And in an earlier post the Minister said:
“The Coalition believes there are limits on what government – as opposed to the private sector – should fund.”[11]
It’s no secret that NBN is today overbuilding existing fibre with public capital in some areas.

Yet according to the Minister, it was counter-productive for NBNCo to connect schools under Labor, but under the Liberals it’s a virtue to connect the local Woolworths store.

There is just no consistency here.

Labor’s 2010 Statement of Expectations set out the objective for NBN to connect 93 per cent of Australian homes, schools and businesses with wholesale only open-access fibre.[12]

In comparison, the 2016 Statement of Expectations issued by the Coalition does not make any mention of business.[13]

Clearly, the rhetorical shift is not an epiphany about competition or the core mission, but rather an epiphany about revenue.

And why is it important for NBN to grow its enterprise revenue?

Because the August Corporate Plan clearly shows that without it, rollout funding would increase beyond $51 billion, and residential pricing would come under stress.

It would be better for the Minister to just be upfront about this, rather than engaging in disingenuous revisionism.

The speech the Minister delivered yesterday was a disappointing display of insecurity. I really don’t intend to comment today as I think it speaks for itself.

I did however take particular offence to the Minister’s claim that Labor would have plotted to restrict 5G.

I encourage the Minister to consult Telstra, Optus, Vodafone or AMTA to see if his innuendo has any basis in fact.

He will find it doesn’t.

By attempting to mislead on the public record the Minister is not only embarrassing himself, but he is friendless in his views.

Scams need to be made a top consumer priority

I now want to move onto the topic of scams.

Earlier this year, I penned an opinion piece on the need to tackle scams.

This is an important issue in the community and the engagement I received affirmed many Australians are frustrated that more progress has not been made to protect them from scams.

Communications technology and digital platforms have made it cheaper and easier for scammers to operate.

The headline figures are well publicised. In April this year, the ACCC revealed the total combined losses reported to Scamwatch and other agencies exceeded $489 million for 2018, an increase of $149 million on 2017.[14]

There were 177,000 scams reported to Scamwatch in 2018, up from over 91,000 in 2014.[15]

Separately, the digital platforms inquiry reports social media scams have increased by 188 per cent over that same period.[16]

While these numbers are clearly very concerning, there is unfortunately no silver bullet to make scams disappear.

However, this does not diminish the responsibility to better mitigate against the risks.

Telephone scams aren’t just a nuisance — they are an assault on the integrity of our numbering system, they are an incursion on the privacy every Australian has the right to enjoy in their home, and they are wholly criminal in their intent.

This has been recognised around the world and different jurisdictions are trying out their own ideas.

The US is implementing technical standards to verify caller ID integrity to improve safeguards against illegal number spoofing.[17]

In the UK, British Telecom introduced Call Protect, a free opt-in service which combines network intelligence and user feedback to prevent calls from numbers on a scam blacklist from reaching households.

This service was reported to reduce the volume of nuisance calls by 65 per cent, with over 2 million UK households signing up in the first three months.[18]

The UK has also trialed handset technology in the homes of some of the most vulnerable people across the UK, such as dementia sufferers, who have been identified by doctors as being at risk from nuisance callers.[19]

In New Zealand, the telecommunications industry has established a Scam Prevention Code.

So there are clearly some options available, each of which have their own advantages and difficulties.

What perplexes many Australians is they see the Government acting forcefully to rush through poorly drafted encryption legislation, yet when we have nearly half a billion dollars being robbed from citizens every year — our elderly and vulnerable parents being harassed in their homes nearly every day —— the same Government is not acting with any urgency.

It is plain to see why three quarters of Australian adults do not believe enough has been done to protect individuals.

In a similar vein, my colleague Tim Watts, flagged serious concerns about cyber security earlier this week.

He noted there are more than a dozen Commonwealth government websites currently on insecure connections, which in turn leave those websites at greater risk of data snooping and malicious redirections.

And yet, the Morrison Government shows no urgency.

There is a duty of care that is not being fulfilled.

In the United States, the Federal Communications Commission has singled out combating scam calls as a top consumer priority for the FCC.[20]

Labor is calling on the Government to show the same level of seriousness here.

We await the report being prepared by the ACMA as part of the Scam Technology Project it has led since late 2017.

It will be important for this report to lay out a plan capable of delivering meaningful protections and noticeable improvements.

Even if the options are imperfect, doing nothing is no longer an option.

Lack of progress on Spectrum Review, Reform and Digital inclusion

We are now at the start of the 46th Parliament and the third term of this Government.

With the six years elapsed, and a further three years ahead, Australia is set to experience almost a decade of this Government’s influence on Communications policy.

Over this period, the contribution of ICT to Australian GDP relative to OECD nations has declined. Furthermore, Australia ranks second-last among OECD countries for relative size of the technology sector and its contribution to the economy.

We have seen the rollout of 4G and early 5G deployment and yet there’s still no sign of a comprehensive 5G deployment strategy for Australia.

There is nothing which shows ambition or substance when it comes to the potential of this sector in supporting productivity and inclusive economic growth.

And nothing about remaining competitive in the region and globally.

What we have seen is a Government that lacks a coherent agenda and, as a consequence, doesn’t appear to be in command of the few processes it has commenced.

The innovation agenda turned out to be little more than a slogan.

The sole outcome of the USO review was to produce a new three letter acronym.

The Digital Transformation Office became the Digital Transformation Agency just as the Children’s eSafety Commissioner became just the eSafety Commissioner.

And then there’s spectrum reform.

The August 2015 announcement, joint between Malcolm Turnbull and Paul Fletcher, stated that the Government had considered and decided to implement the recommendations of the spectrum review, and set out an implementation timetable.

But the biggest reform of spectrum policy and its management framework in a generation has stalled.

After helping start it off, over four years ago, the current Minister is seemingly back at square one asking basic questions such as what benefits will the proposed reforms deliver? And are wholesale changes the way to go?

One would assume the Government had a well-considered view on such questions before deciding to commit four years of significant public sector and industry resources to a wholesale reform process.

When the first exposure draft of the Radiocommunications Bill was released in 2017, Labor acknowledged the importance of getting spectrum reform right.

But I also noted with caution that the overarching policy intent on key matters was yet to be articulated.[21]

The consultation was conducted in the absence of draft Ministerial policy statements on matters as fundamental as the single licensing system - including licence issue and conditions, and renewal rights, for example.

This meant the exercise was challenged by chicken-and-egg style uncertainty.

Two years later, the incoming Minister says he ‘will not restart the stalled spectrum reform process until he is satisfied that the proposed new regime will provide superior benefits to the system it replaces’.

Which is to say, he is reconsidering the decision made in August 2015.

It remains the case that it is essential to get spectrum reform right and, to pick up on recent piece by Giles Tanner and Jock Given, ‘Whatever happened to spectrum reform?’, it may well be the case that ‘this latest pause in the process may not spell the end of valuable reform, but actually make it more likely’.

But my point is that the stalled work program is emblematic of a Government without a coherent sense of what it is trying to achieve.

For all the rhetoric about the need for efficiency and certainty for industry, they’ve been unable to deliver on it.

The other big consultation to engage industry of late is the Government’s consultation on its response to the Final Report of the ACCC’s Digital Platforms Inquiry.

Much like the Banking Royal Commission, the Government’s heart was never really in the Digital Platforms Inquiry.

Back in 2016, the Government rejected Labor’s calls for an inquiry of this nature, saying ‘all the facts are known’.

Then in 2017 they agreed to commission the inquiry, but only as part of a desperate crossbench deal to get their changes to media ownership laws through Parliament.

Meanwhile, the Government has failed to address the true media reform agenda, despite the well-documented need to update the policy and regulatory framework for broadcasting and content regulation to keep pace with technological change and convergence.

Now the Inquiry is complete, the Minister has been reported as saying: ‘The loss of revenue by traditional media because of tech giants may not be as bad as some suggest’.

It remains to be seen which of the ACCC’s recommendations the Government will take up.

They have, at least, said they accept the need to develop a harmonised media framework.

Industry stakeholders have indicated support for a number of the ACCC’s recommendations, including for a harmonised media framework.

However they have also expressed concern about the ACCC’s suggested privacy and consumer law changes which, they contend, go well beyond the scope of the inquiry and have broad, economy-wide implications - for which there is insufficient supporting analysis or data in the Final Report to justify.

They note that the Inquiry was commissioned to explore the impact of digital search engines and social media platforms on media and advertising services, with a particular focus on news and journalism.

There is concern amongst industry that a cross-bench deal about public-interest journalism now has economy-wide implications for privacy law.

There is much policy and regulatory work that needs doing that isn’t getting done.

Digital inclusion

This brings me to digital inclusion.

The Australian Digital Inclusion Index 2019 again finds that while digital inclusion is improving, the gaps between digitally included and excluded Australians are substantial and widening for some groups.

The research by Telstra, RMIT and the Centre for Social Impact at Swinburne University, finds that collaboration across all levels of government is needed if the benefits of digital technology are to be shared by all Australians, and that digital inclusion should be an integral part of economic policy making and strategic planning.

Equally telling is a recent report from Alpha Beta, ‘Australia’s Digital Opportunity’, that states the key lesson is that governments need to take a coordinated approach to the digital economy.

Over the last six years this Government has not delivered a genuine digital economy strategy to call its own.

The Government’s Clayton’s strategy, Australia’s Tech Future, isn’t a framework for collaboration to drive outcomes - or a whole of economy transformation.

It is merely a descriptive report of the fragmented status quo. This simply isn’t good enough.

The lack of digital inclusion for deaf and blind Australians is compounded by the risk to traditional services they rely on.

Deaf Australians, including elderly Australians, are currently anxious about the loss of CapTel.

Blind and low vision Australians are concerned about the loss of Vision Australia Radio, not to mention the ongoing lack of audio description of television.

This week in London, the Lord Mayor of the City of London will launch the Future.Now coalition whose mission is to bring together organisations to motivate people and businesses across the UK to boost their digital skills to succeed in the digital age, with mapping and measuring key elements of the mission.

Meanwhile, the Australian Digital Inclusion Alliance is calling for the development of a Digital Skills Strategy in Australia to coordinate all private sector, community and government work on digital skills.

In my three years as Shadow Minister I have repeatedly called on the Government to lay out a coherent agenda for the sector.

I haven’t done this for my health.

I wasn’t saying it for fun.

And for our part, Labor took a credible policy for a digital inclusion drive to the recent federal election.

I am now still saying it because it’s important and something needs to be done.

For almost four years, this Government has used CommsDay to provide narrowly-focused updates and descriptions of processes underway.

The industry deserves more than updates, they need a plan for the next decade.

The Government needs to spell out its direction.

Ask the right questions.

Provide consistent signals and well-directed consultation processes, not disingenuous or confused rhetoric.

Provide leadership and predictability, around which industry can organise resources, planning and investment.

To communicate a coherent agenda and roadmap for policy work and law reform.

Then the Government needs to follow through.

We can’t afford to waste another three years without a coherent plan.

Closing:

I started my speech speaking about 2019, and I wanted to close with some brief remarks on the road ahead.

The task is an important one.

Our technology sector is ranked second last in the OECD for its relative contribution to the economy.

Australia is ranked 58^th in the world for fixed-broadband speeds.[22]

And according to the most recent ABS data from July 2017, over 2 million Australians are not using the internet at home.

Clearly, we can do better.

If we don’t, there is a serious risk Australia will miss out on the full promise of the digital economy.

In April this year, CommsDay is where I chose to announce Labor’s NBN election policy.

I made that choice because this is a serious forum, and I felt we had a considered policy to put forward.

I was appreciative that it received a fair hearing.

A key objective of the policy was to show a line of continuity in what we had been speaking about over the past three years.

That is, to show our values and our policies joined up.

The next three years will be different to the previous three. My policy priorities and focus will evolve, but the underlying principles and approach will remain the same.

I want to thank the industry, Communications Alliance, AMTA, ACCAN for their ongoing engagement.

I want to acknowledge NBNCo for its professional conduct during the caretaker period, and progress with the rollout.

And I want to again thank CommsDay for providing this important juncture in our calendar. It prompts us to reflect and advance our thinking about how we can make this sector better.

Thank you.