Senator the Hon Helen Coonan

Minister for Communications, Information Technology and the Arts

Deputy Leader of the Government in the Senate

Consumers in an era of open competition

Address to the Consumers' Telecommunications Network Conference 2007

Sydney

Wednesday 16 May 2007

Good morning everyone and thank you Robin [Wilkinson, Chair, CTN] for the opportunity to address your annual conference.

Introduction

Firstly may I say how glad I am to be able to be here today. For the last two years this conference has been held during parliamentary sittings, so it is a great pleasure to be able to be here in person.

Before I dive into the substance, I must also place on record my profound thanks, and those of all consumers, to John Pinnock, who just finished his last public speaking engagement as Telecommunications Industry Ombudsman.

John has been the ombudsman for the past twelve years, during which time there has been increasing pressure due to the amazing growth in the technology sector.

John has seen the TIO through this period with professionalism, responding to a dynamic and changing industry environment, while maintaining a strong focus on investigating, resolving and determining complaints and I thank him for his service.

Ten years of competition

Ten years ago the Howard Government spearheaded the liberalising of the telecommunications sector and encouraged competition.

This focus on competition has produced enormous benefits for the Australian economy as well as for consumers.

When the Government was elected in 1996, it inherited an industry structure that consisted of just two providers, Telstra and Optus.

Competition was limited and consumers were the loser.

Since the Government's telecommunication reforms of 1997, there are now 167 providers vigorously competing on the telecommunications field.

And it is consumers that have been the major beneficiary of competition reforms. Fixed line prices have fallen by 18.9 per cent and mobile service prices have fallen by a whopping 36 per cent. In fact, since 1997, the overall average price of telecommunications services has fallen by 26.2 per cent.

But of course with technology evolving so fast, there are always new challenges being faced by government - policy in this area is never a ‘set and forget' exercise.

Today I would like to outline the Government's coordinated national solution for Australia's broadband needs and highlight the strong consumer safeguards that are in place today.

Government's broadband plan

Because it is of course broadband that is front of mind at the moment.

And for good reason, as it is communications technology and broadband that are transforming the way we work, the way we interact and the way we learn.

They are critical for all sectors to operate in a modern economy, whether it is the government, private or the not-for profit sector.

They will underpin Australia 's productivity gains and help to lock-in Australia 's continuing economic prosperity.

The Australian Government is tackling these issues on a national level.

Our national broadband policy is not one dimensional nor static and most importantly it is fully costed and deliverable.

The Australian Government has an integrated strategy that will provide all Australians with access to high speed broadband regardless of where they live.

It will continue to promote the development and use of smart communications technologies in key areas such as health and education and I have been rolling out the Clever Networks program to great in this area.

And it will provide a secure and safe online environment with consumers' interests at the forefront.

The Australian Government will be taking a responsible and measured approach.

We will not make policy decisions based on half the facts.

We will not pick technology winners.

We will not denigrate Australia's broadband performance to support a flawed broadband proposal.

Labor's doomsday rhetoric on broadband has come back to haunt them with the release yesterday from telecommunications analyst Market Clarity, that has re-cast Australia's world ranking as 11th for total broadband subscribers, at ninth position if only broadband over 256kbps is measured and as high as a record sixth position globally if statistical banding is adopted.

Market Clarity said the OECD ranked countries by counting the number of Internet connections that were faster than just 64 Kbps.

However, Australia quite rightly does not consider or define Internet speeds slower than 256 Kbps as broadband. So unlike many other countries, Australia does not submit these slower Internet connections to the OECD.

In fact the OECD had, until recently, been using ACCC data which only sampled the top 8 Internet Service providers out of an industry of 650.

It has also been revealed that the recent OECD assessment did not take into account any of Australia's wireless broadband connections which would have placed Australia even higher up the league table.

It's back to the drawing board for Labor and they will now have to come up with some new misleading data to criticise Australia 's broadband standing.

There have been many broadband furphies peddled by Labor and other groups with a vested interest in criticising our broadband performance.

Labor's claim that Australia is ranked 25th in the world for broadband speeds is absurd and comes from a five year old survey on international under sea communications cables. It has absolutely nothing to do with broadband speeds available to consumers.

International cables are the very high capacity Internet pipes that run under-sea and connect Australia to the rest of the world. The 2002 survey did not refer to a subscriber's connection to the Internet via their service provider which is where individual broadband service speeds are determined.

Either Labor does not know the difference between home broadband Internet and international undersea cables or they are deliberately misleading the Australian community to suit their needs.

The facts are that 90 per cent of Australian premises can access speeds of between 2Mbps and 8Mbps and more than 50 per cent of metropolitan areas can access even faster speeds through ADSL2+ and cable broadband platforms.

But Labor is desperately trying to justify spending nearly $5 billion of taxpayer's money on a network that the industry is prepared to fund itself.

But, that is not to say that more is not needed to further improve.

In a fast paced environment we need to be ahead of the game, and well placed to scale up, so that Australians can connect wherever they want to use the Internet to meet their ever increasing needs.

Clearly the objective needs to be to reach the right balance between achieving regulatory certainty and a fair return on investment while maintaining the vigorously competitive market structure that consumers have benefited from.

Until now, consideration of the Telstra and G9 proposals has been a matter for the regulator and government but ultimately, it will be the level of consumer take-up that will determine the business case for any new high speed broadband service.

To date there has been little scrutiny of the prices that would be charged for accessing a new fibre network and it is incumbent upon Telstra and G9 to tell the public what it would cost consumers.

If high speed broadband in Australia becomes unaffordable, then it won't matter if it is widely available.

People won't buy what they can't afford.

The healthy future of Australia's competitive communications market and the need to maintain choice and affordability for consumers is a key requirement in the broadband challenge that Australia faces.

Therefore, I support the detail of the competing proposals being put into the public arena so that everyone has an opportunity to consider the merits of each proposal, including the proposed prices and an opportunity to assess the impact on both wholesale access and retail prices.

Coordinated National Solution

The Government recognises that Australia will require a mix of technologies to deliver the services that people will need into the future.

In some circumstances this may mean VDSL running off fibre, in others it maybe ADSL2+, in other situations high speed wireless may be the right solution.

It is a very brave person who would say that they knew all the technological answers for Australia over the next five years.

The reality is that a mix of technologies will be the most effective means to deliver the services that Australians need.

The Government has a coordinated national solution for Australia 's broadband needs that ensures that all Australians, regardless of where they live, have access to affordable high speed broadband.

In Remote Australia – and anywhere a commercial broadband service is not currently available – affordable subsidised broadband is already available via the $163 million Australian Broadband Guarantee.

In Rural and Regional Australia the $600 million Broadband Connect Infrastructure program will leverage private sector investment to transform the way communities access broadband.

This will be a new leap forward for regional Australia.

It will break down distance barriers.

It will open up access to the latest communications technology on the farm, for small businesses and in the home for education.

This program aims to extend affordable high speed broadband coverage to 98 percent of premises.

Our objective is to build a new wholesale national broadband network that will enable rural Australians to access high speed broadband at prices equivalent to metropolitan Australia.

The network will be open access so that it promotes competition and provides a choice of services for regional Australians.

The Government is also supporting e-health and online education services in rural areas through the $113 million Clever Networks program. This important program is harnessing smart solutions such as interactive distance education and real time medical diagnosis for hundreds of rural hospitals.

The Coalition Government knows that Australia's future prosperity includes having access to affordable fast broadband for all Australians regardless of where they live.

We will continue to take the lead in shaping Australia's broadband future through a stable, yet responsive regulatory environment, through targeted and effective investment in uncommercial areas and by ensuring there is appropriate incentive to invest in next generation broadband infrastructure.

Labor's Proposal

I read with interest a comment in the March edition of the CTN Quarterly, which raised concerns with Labor's uncosted, untested unworkable and essentially undeliverable proposal to lay fibre end-to-end across Australia.

The two concerns raised, neatly highlight the Government's position on Labor's discredited proposal.

There is no debate about whether Australia can or should have a new high speed broadband network. We will. The question is how we do it and what commercial incentives are needed to get the network build underway in built up areas whilst investing taxpayer's money in underserved areas in regional and rural Australia.

This is where we differ vastly from the Labor party.

There are two commercial proposals on the table for a fibre high speed broadband network in Australia – one by Telstra and another by a consortium of nine leading telecommunication providers, called the G9.

Both felt the need to take out full page advertisements last week telling the world they do not need taxpayers funding to build their fibre broadband networks in built up areas.

What they need is a regulatory framework that is conducive to investment and meets their respective requirements. Labor has fundamentally misunderstood was this debate is about.

The difference between the Government and Labor's broadband proposal is simple:

Labor plans to dip into the Future Fund and drain the $2 billion Communications Fund which has been set aside exclusively for rural and remote Australia to achieve what industry is already prepared to build.

And then Labor claims the impossible – that a mere $4.7 billion of taxpayers' funds, matched by funding from the private sector, would be sufficient to provide fibre to 98% of the population.

This is a claim that has quite rightly been ridiculed by industry, with many suggesting that Labor should have done their homework and have suggested that they have miscalculated by at least a factor of two.

Whereas the Coalition Government will let the industry invest in a fibre network build in commercial areas – at no cost to the tax payer, while directing its considerable financial resources towards a new open access high speed broadband network in regional and rural Australia where industry would not invest without Government funding.

No consumer protections under Labor

Worse still, Labor has indicated that the true cost of its broadband policy is that it will be open slather for the vested interests to re‑write the consumer protection framework.

Although none of the detail will be available until after the election, Labor has indicated that it will be asking bidders to outline their wish list for winding back the consumer's competition framework.

Consumer safeguards are a major plank of the Government's telecommunications regulatory platform.

The Government is absolutely committed to the maintenance of these safeguards. Labor can not offer an equivalent commitment unless and until it comes clean with what it will abolish under its regulatory wind back.

But what are these consumer safeguards? And why are they so important?

The consumer safeguards include the Universal Service Obligation and the Customer Service Guarantee.

These protections give every Australian the explicit right to a telephone and to have that telephone connected and repaired in a timely manner.

These protections give those with life threatening conditions the right to a priority assistance service.

Most importantly, these protections ensure that all Australians have access to capped, untimed local phone calls.

Only the Coalition Government has said that these protections are not negotiable.

Only the Government is committed to important community services like the Telecommunications Industry Ombudsman and the National Relay Service.

Labor would put all of these essential protections at risk in order for a quick media grab about broadband.

Additionally, the CTN Quarterly expertly picks up on the fact that there are a group of consumers that are completely left out of Labor's broadband proposal.

Labor has pledged to abolish the $2 billion Communications Fund.

This $2 billion Communications Fund will provide an income stream to ensure ongoing improvements in telecommunications service for regional consumers.

Of course, draining the Communications Fund, removes the income stream.

Labor has no plans for regional and rural consumers once it has abolished the Communications Fund. These consumers will be stranded under Labor.

Budget measures

In stead of winding back consumer protections, the Government is actually committing more funding to consumer protection.

This year's budget included an additional $16.3 million for the Australian Communications and Media Authority to ensure that it's adequately resourced to carry out its vital role as the regulator in the increasingly complex and converged communications environment.

But I am sure that everyone is this room knows that the consumer safeguards that worked yesterday, may not be as effective tomorrow as consumers are constantly faced with challenges as a direct result of rapid technology growth.

Therefore, the Australian Government is providing $13.6 million to help protect Australians from sophisticated online attacks targeting their home computers and small businesses.

The Government has also announced the expansion of the Stay Smart Online website to include a National Alert Service to provide home users and small businesses with up-to-date information on e-security threats.

This package of measures will provide Australians with the information and skills to improve their computer defences and ensure they stay smart online.

One of the most important aspects of staying safe online I believe is protecting our children from offensive material that is readily available over the Internet.

The Australian Government has a strong track record of tackling inappropriate and offensive content online. We have done a great deal to protect consumers, and especially children, from illegal and offensive online content.

We are tackling this issue using a combination of legislation, regulation, education and technology.

And the Government is currently in the process of developing a world first through the new $116.6 million Protecting Australian Families Online program where every Australian family will be entitled to a free Internet filter for their home computer.

I am proud to say that Australia is a world leader in this field.

This program also includes an awareness campaign to educate parents about online dangers and how they can protect their children.

Codes Development

Finally, I would like to quickly mention the development of the Telecommunications Consumer Protection Code which was released in draft form yesterday.

The development of the single consumer protection code is a partnership between industry and consumers to achieve the best results for both parties.

Consumer participation in code development is an important feature of effective self-regulation in telecommunications.

Improvements in many codes have resulted from industry and consumer representatives working through important issues.

Consumer organisations such as CTN also have a major role to play in ensuring that consumers are empowered and informed in their decision making.

Conclusion

There are always many voices in the continuing regulatory debate on telecommunication services and consumer voices are very important in that debate.

In an industry as dynamic as telecommunications, it is to be expected that the debates will continue.

The theme for this conference and the wide range of speakers and panellists will no doubt provide lively discussion as well as some interesting views and opinions about the best way for consumers to contribute in the telecommunications regulatory process.

It gives me great pleasure to officially open the 2007 Consumers' Telecommunications Network Annual Conference.

Thank you