Telecommunications Universal Service Management Bills 2011

I rise to support the Telecommunications Universal Service Management Agency Bill 2011, the Telecommunications Legislation Amendment (Universal Service Reform) Bill 2011and the Telecommunications (Industry Levy) Bill 2011. The principle behind this legislation is universal service obligation. I will discuss how that sits within the current context of the rollout of the National Broadband Network and I will then come to the detail of the bills.

The concept of universal service obligation has a long history—it goes back several hundred years, to some of the early postal services. Its history has been both market driven and, in more recent times, legislatively based. Obviously in the early days of new technology a particular provider in a market will be the only provider or one of only a few providers, and the history of the postal services is that some providers said that the defining characteristic of their operations was that for a single price they could deliver mail across a particular geographical area—across a country or across a state and so forth—for the same price. They were driving a market that was geographically wide, where there was no advantage from living in one of the population bases, in a big city—they were able to expand their market by providing services to people in more remote areas.

Obviously as the communications technologies developed and changed through to telegraph and telephone and today to broadband, an increasing number of players in the field looked to use this sort of marketing advantage—the single price delivery model—to distinguish them from any competitors. It was a commonly accepted aspect of communications markets that there was a universal service capacity—not always an obligation.

In more recent times, because concepts of access and equity have grown within communities, there has been more of a demand for this service not just as a marketing advantage for particular companies but as an obligation, as a right that citizens in a community or society could reasonably expect. This is particularly the case when, as our societies have become more complex, access to communications technologies has been a significant factor in people's ability to participate, whether that is participating in the politics of decision making of a nation or participating in work, study or community activities, or whether it is to participate by remaining connected to family and communities. Over time countries developed the view that it was not enough to leave it as a simple marketing advantage for a provider to be able to offer this service.  With more competition and as new markets developed, people wanted greater confidence that they would not be left out.

In a nation like ours, it is no surprise that this concept of universal obligation is very important. If you sit in some of the big cities where multiple competing providers are all trying to cherry-pick very lucrative markets and provide all sorts of options, it is difficult to understand how frustrating things can be for people not very far away. Indeed, this is the case even in an area like mine or in Wollongong, in the electorate of the member for Throsby, who spoke earlier in this debate.

I have been a member of parliament for just over seven years. Some of the first cases I had when I came to this place were about payphones. They were about people's great frustration that payphones were being removed.

The argument was raging that 'we don't need so many payphones anymore as people are walking around with mobile phones' but some people were saying, 'That's all very well if you can afford to have a mobile phone.'  Quite a few campaigns were run. I have not had any in recent years, but the payphone service issue was very big.

In recent years there has been constant contact to my office about access to decent broadband. My area is a beautiful, wonderful part of the world—and I encourage everybody to come and have a look—and we have a fabulous escarpment that runs down and meets the sea, but in parts there is a very narrow strip of land. If you have to rely on anything like wireless and even mobile phone technology it is very frustrating, especially as you get a lot of people with quite lucratively paying jobs in Sydney who think it would be really nice to live in Stanwell Park or Otford or such suburbs. Indeed, if you go to work the polling booths on election day, you find half of my colleagues on the other side have holiday houses in some of those northern suburbs, so I run into them at polling booths.

The member for Bradfield would know I have met a few of his friends in the local government election campaigns at polling booths in those suburbs. So it is a beautiful part of the world and a lot of people aspire to live there, and I understand why they would, but they then discover they cannot get mobile phone reception or decent broadband and it will cost them a fortune if they are to be put on wireless, which drops out all the time.

In these more modern times access to good broadband service is a really significant issue for people. What we are therefore challenged with is this: how do we best ensure access to developing and new technologies, particularly communications technologies, so that they are made available as best we possibly can? In Australia we started to address that more formally in 1991, when we had the Telecommunications Act introduced, an act to give the right of access to voice telephone services, which became the universal service obligation. Of course, it has been amended and adjusted over time to recognise the new issues as they have arisen but it is based on the very fundamental concept, which I think is a very strong one in Australia, that it should not matter where you live or what your income is or what your educational circumstances are as there are some fundamental communication access rights that we should ensure people have. A lot of that is driven by the fact that we know that families, communities and societies across this nation, particularly in our rural and regional areas, rely very heavily on their right to participate. Their responsibility to contribute to us as a nation relies on that access and availability.

These three bills sit directly within that tradition and they are addressing the newest development, that being the newest area of communications infrastructure and technology, the rollout of the National Broadband Network, and how universal service obligations will sit within that new framework. The three related bills will deliver the reform required to support the structural separation of Telstra by putting in place the necessary reforms of the universal service obligations, so it is about moving from a directly regulated model that identifies a provider. We have gradually moved to more competition within that, recognising the diversity in the market. This sets up the new structure to operate under an infrastructure based company like the National Broadband Network Co. with competing providers accessing that infrastructure. So it sets up a long-term framework for delivering those three existing services that I have covered: the universal service obligation, which is about reasonable access to basic telephone services and to payphones; the important development of the National Relay Service, which was put in place for those with speech and hearing impediments; and, importantly, the emergency call services, those being the arrangements for handling calls to 000.

They are the existing three which have to be dealt with in the new framework, but it also provides for two new sets of arrangements. Firstly, it is to assist in the migration of voice-only customers from the Telstra copper network to the NBN fibre network. I make the point that was touched on yesterday by my colleague the member for Throsby, who worked in a union that had a lot of coverage in this area, that we should not forget that the copper network is not a Rolls-Royce version out there in the communities anyway. Anyway, one of the other issues that I constantly deal with in my area, where we get quite a bit of water, is the ongoing one of a very poorly maintained ageing copper network, so this is about making sure that, as people migrate to the fibre network, if they only want a voice based service they are able to get that. Secondly, it is to assist in the development of any necessary technology solutions to support the continued provision of existing public interest services that are provided on that copper network—things like traffic lights or public alarm systems that are working off the current network.

The reforms do this by establishing TUSMA, the new agency which will have responsibility for the provision of the USO and other services. They will do this now through a competitive contractual and grant arrangement as to third parties in the same way that we have now got the National Relay Service operating. So that is a change in the way that we are delivering it to recognise the multitude of providers that will be riding on the back of this fibre-in-the-ground infrastructure. The TUSMA Bill will therefore provide for the establishment of TUSMA as the statutory agency. It will have responsibility for the effective implementation and administration of the service agreements that deliver universal service and other public policy telecommunications outcomes. The bill sets out TUSMA's corporate governance structure and its reporting and accountability requirements. It provides for the minister, subject to the scrutiny of the parliament, to set standards, rules and benchmarks for TUSMA's contracts and grants and it sets out measures for collecting an industry levy to contribute to TUSMA's costs.

It is the government's intention to phase out the current USO regime by transitioning from the regulatory model to a more open competitive and contractual model. The reform bill therefore allows, after an initial transition period of approximately two years, for the direct USO regulation to potentially be lifted from Telstra. However, this can only occur if the minister is satisfied that there are satisfactory contractual arrangements in place. The minister will also be able to determine standards, rules and minimum performance benchmarks for TUSMA contracts or grants. These will be subject to parliamentary scrutiny by way of disallowance. Before removing the USO regulation, the government intends to make contract conditions that mirror the existing legislative

standards, rules and benchmarks currently covered by USO regulatory instruments. Additionally, the existing regulated customer service guarantee—the CSG—that applies to all providers of standard telephone service will continue to apply to telephone services provided by Telstra under the TUSMA contract. The existing rules for the emergency call services remain and the ACMA will continue to regulate the emergency call service provider.

These three bills combine to put this framework in place. The government will contribute base funding of at least $50 million per annum for each of the first two financial years of TUSMA's operation—that is, 2012-13 and 2013-14—and $100 million per annum after that. The bills also identify the stakeholder consultation and review processes. The TUSMA is able to establish advisory committees as it sees the necessity and the government will undertake a comprehensive statutory review of the universal service arrangements before 1 January 2018.

The passage of these bills is important to give effect to the reforms of the universal service obligations that were announced in June 2010 when Telstra entered into the financial heads of agreement with NBN Co. that commenced the structural separation as well as the transfer of customers over to the NBN Co. fibre network. In her contribution yesterday the member for Forrest outlined her frustration at not being able to get fibre based NBN Co. services into her area as quickly as her community would like. It reflects the fact that those on the other side are very much tied to a position that many of them are not happy with, because the NBN Co. is about universal delivery of infrastructure so that people can access service providers much more effectively than they currently do.

The universal service obligation is an important component of that. These bills deserve supporting also because they reflect, regardless of the NBN rollout, a more up-to-date and modern application of that hundreds-of-years-old concept of universal service provision of communications technology.