Senator the Hon Helen Coonan
Minister for Communications,
Information Technology
and the Arts
Deputy Leader of the Government
in the Senate

Address to The National Farmers’ Federation Policy Council Annual Meeting

Canberra
Thursday June 13 2007

Introduction

Thanks very much David, it is a pleasure to be here today to address this meeting.

Being a country girl myself, I always look forward to being able to address the NFF.

I am unashamed of my continued focus on providing good telecommunication services to regional and rural Australians.

This morning I would like to mention the benefits that encouraging competition has had for regional and rural consumers and to set the scene for the on-going broadband debate.

But before I dive into the detail of my speech I would like to mention the special relationship between the NFF and the Government.

In particular, I place on record my appreciation for the constructive approach the NFF has taken in relation to communications and the services that are vital to members across the length and breath of Australia.

More broadly, the NFF has been an important part of the Government’s telecommunications policy development process for many years and has certainly provided valuable insight into some of the major issues facing this country.

The NFF’s Strategic Plan identifies four areas of focus up to 2009, and it is interesting to note how these align in many ways with Government priorities.

These four areas are wider market access, improved efficiency, sustainability of production, and better communication of the agricultural message.

The Australian Government is certainly listening to the rural community in these and in other areas of interest and, with the help of the NFF, much progress has been made across many sectors.

One of the greatest contributors to delivering better services to regional and rural has been opening up Australia to competition in telecommunications.

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

When the Government was elected in 1996, it inherited a near duopoly in the telco industry.

Back then people were just embracing dial-up internet. Broadband was a distant concept.

In fact, it was only around 5 years ago that our political opponents were suggesting mandating a dial-up rollout to all Australians – at a total cost of around $5 billion!

In 1996, competition was limited and consumers were the loser.

Open competition works on the premise that strong infrastructure and service based competition produces real benefits.

These include significant price reductions, service choice and flexibility, and greater levels of efficiency in the telecommunications sector.

This is essential to maximise the efficiency of the telecommunications sector, its contribution to our economy and to protect regional and rural consumers’ rights and guarantee them fair access to 21st century telecommunications services.

The Government’s work in liberalising the telecommunications sector and encouraging competition has had direct results for the Australian economy and for consumers.

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

And there can be no argument that consumers 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.

The Australian economy has grown by $15.2 billion since 1997 due to the Australian Government’s reforms of the telecommunications sector.

In 2005-06 flow-on effects from the changes in the telecommunications sector included the creation of 17,550 additional jobs and more than $660 million in additional investment.

Additionally, the Australian telecommunications market has gone from only two licensed carriers in 1997 to 157 licensed carriers in 2007.

There have been dramatic changes in the structure of the market, with fixed telephony now joined by new mobile, internet and broadband services.

Voice over Internet Protocol—VoIP—services were not really on the radar in 1997.

The number of VoIP providers has risen from around 25 in 2004-05 to around 240 providers at present. An estimated 750,000 services are in operation, representing about 4.8 per cent of the population.

Over the last 10 years, four major carriers have built competing mobile networks and these are in the process of being upgraded to provide 3G services.

The number of mobile services has risen from about 5.9 million at the end of 1998 to 19.76 million in 2005-06.

Now eight per cent of mobile phone users currently subscribe to a 3G service and there continues to be significant investment in deploying new broadband networks.

However, I recognise that all of the reforms that brought these substantial benefits have not been without heartache.

The sale of Telstra, for instance has been a highly contentious issue.

But the direction the Government has taken has, and will be, justified. The regulatory regime is all about understanding market drivers, encouraging industry to innovate and take advantage of what new and emerging technology offers while ensuring that regional and rural Australia is not left behind but is well placed to get the benefits of a thriving, competitive environment.

And we have not taken these steps in a vacuum. As you all will be aware, the Government has had two major reviews into the telecommunications industry to ensure that services in regional and rural Australia are not just up to scratch, but will continue to improve in leaps and bounds into the future.

In 2000, the Government established the Besley Telecommunication Service Inquiry to assess the adequacy of telecommunications services in Australia.

In response to concerns raised in the Besley report, a range of new consumer protections were put in place.

Importantly, the Government also introduced new initiatives such as increasing the mobile phone coverage along highways and the satellite phone subsidy scheme.

The 2002 Estens Regional Telecommunications made 39 recommendations, all of which the Government has now fully implemented.

The Government's response to the Estens recommendations, included allocating more than $180 million to further improving existing telecommunications services, locking in service improvements and future-proofing telecommunications services in regional, rural and remote Australia through a $142.8 million program of targeted broadband spending to connect underserved areas to broadband.

Additionally, the Government issued Telstra with a licence condition requiring that Telstra to maintain an effective local presence in rural, regional and remote Australia and to fully consult with regional, rural and remote customers to ensure their concerns and service requirements are accommodated.

Implementing the recommendations from Estens has ensured that improvements to services have been achieved and regional and rural consumers share equitably in the benefits of future advances in technology.

Next Regional Telco Inquiry

I am now turning my attention to establishing the next regional telecommunications inquiry – which is scheduled for early 2008.

I can announce today that I intend to constitute the committee for the next Regional Telecommunications Inquiry in the near future.

I will be consulting with my colleagues over the coming weeks, including the Deputy Prime Minister, on the make-up of this committee and its terms of reference.

This legislated telecommunications inquiry will be independent and will make specific recommendations on the future needs of regional and rural consumers.

The Government’s implementation of the recommendations from these three yearly independent reviews will be funded from the interest earned on the $2 billion Communications Fund. This was enshrined in legislation with the passage of the T3 package.

The Communications Fund is vital to the future of regional and rural consumers.

This fund will provide around $400 million every three years to assist in the provision of state of the art services for regional areas.

Government’s broadband plan

These customer protections measures that I have discussed, work in addition to the reforms that Government has undertaken in introducing competition to the telecommunications industry.

But it is broadband, particularly to residences and small businesses like farms, that continues to be front of mind in Australia 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.

The Australian Government is tackling the challenges facing industry 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, research and education.

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, nor political expediency and we will not be stampeded into making decisions that could lock industry into an uncertain future or take the market backwards.

In fact, the Government has been funding the rollout of broadband infrastructure across Australia since 2004.

The Government has already extended broadband coverage to a further 1.3 million premises with more than $500 million in subsidies.

In August 2006, we announced the $600m Broadband Connect Infrastructure Program, a significant new policy approach that changed focus from a customer subsidy for a broadband connection to an investment toward building a new competitive national wholesale network.

The Government’s aim was to leverage a high level of commercial contribution towards building the new national wholesale network, with the Government’s contribution assisting the business case for rolling out to non commercial areas and premises.

The Government is strongly committed to the proposition that all Australians, regardless of where they live, should have access to high speed broadband.

We will not be picking technology winners, but allowing the industry to put forward the best mix of technologies to meet the varying needs across Australia’s vast land mass.

It is a very brave person who would say that they knew all the technological answers for Australia over the next 5 years. Just a couple of years ago Labor’s only foray into the internet was a policy to mandate a dial-up rollout for $5 billion.

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

For instance, for built up areas, VDSL running off fibre to the node may well be the best solution. That is a commercial decision for a builder of a new fibre network.

However, when you get out into the more regional and remote areas, there are a limited number of nodes and even less kerbs for fibre to run to, so a wireless solutions may be the appropriate solution.

The Government has a coordinated national solution for Australia’s broadband needs that ensures we will not be leaving regional and rural Australia behind.

In Rural and Regional Australia the Broadband Connect Infrastructure program will leverage private sector investment to transform the way communities access broadband. An announcement on this will be made shortly.

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.

Indeed, the Government’s comprehensive broadband policy 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.

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.

Human dividend

It is critical to get this right as delivering broadband to all Australians also has a real human dividend, particularly for regional and rural Australia.

The Clever Networks program is providing $113 million to rollout innovative broadband applications to enhance access to and use of broadband for the delivery of health, education and other essential services in regional Australia.

I recently announced that 16 of the projects that applied for funding under Round One of the Clever Networks program had been successful.

One of the successful projects, ‘Scope’, is a non profit organisation committed to helping people with disabilities participate in community life.

Using broadband, in an innovative way, this project will benefit therapists, clients and their families in remote and rural areas—linking communities with vital information, resources and support systems.

The project will significantly benefit therapists in their time management cutting down their travel and administration time, and allowing them to have more focused time with their clients.

I recently announced two other Clever Networks projects in regional New South Wales, which promote the innovative use of broadband technology in the health sector to enable faster patient diagnosis, eliminate unnecessary travel time and enable the remote assessment of critically ill patients.

This will enable medical teams to work effectively across all parts of the system and across geographic boundaries.

For example, broadband connections will allow an emergency patient in Broken Hill to be assessed by a medical expert in Bathurst using remotely controlled cameras and two-way audio connections.

These are just a few examples of what is possible with advanced broadband capability and shows how important universal access is.

CDMA Coverage

Just before I wrap up, I would like to touch on another issue that I know to be of great importance to the NFF and that is the issue of the change from CDMA to Next G.

The Government recognises the importance of adequate mobile phone coverage to Australians, particularly those living in rural and regional Australia.

That is why the Government has spent over $150 million extending mobile phone coverage in towns, along highways and in strategic locations.

Telstra has made a public commitment that it will not switch the off its CDMA network before its Next G network provides the same or better coverage and services.

I established a working group last year, consisting of key representatives from Telstra, the Department and ACMA to tackle the issues relating to the transition, such as the information Telstra provides to customers, handset availability, coverage and contractual matters.

In addition, last year I directed the Australian Communications and Media Authority to undertake independent coverage audits of both the CDMA network and the Next G as a key part of verifying Telstra’s public assurance.

The initial coverage audits covered about 100 sites, focusing on rural, regional and remote areas.

I can now announce that I have requested that further audits of CDMA coverage be conducted so that every state and the Northern Territory are covered.

The Next G coverage will be audited at an appropriate time, after Telstra advises that the new network is fully deployed.

This process has been put in place to ensure that Telstra meets its own public commitment that it will not switch off the CDMA network until coverage on the Next G network is equivalent or better.

This stands in stark contrast to the experience that regional and rural Australians endured when the old analogue mobile network was turned off without a replacement rural network in place.

By contrast, this Government has a plan to ensure a successful transition to next generation technology.

Unlike Labor, we are committed to providing quality communications service to all Australians regardless of where they live.

Conclusion

This, Ladies and gentlemen is just the flavour of the broadband communications landscape we are working in.

And in this competitive election atmosphere I am sure you would expect me to provide some critique of why Labor’s single broadband announcement is an inferior and incomplete answer to Australia’s broadband needs.

And I will do this in detail when I make the Government’s announcement.

What I can say is that the Government will not be wasting $5 billion of taxpayer’s funds into building a Fibre-to-the-Node network that industry will fund itself.

Mr Rudd often describes his broadband plan as “Labor to its bootstraps”

It is indeed “Labor to its bootstraps” as it wastes taxpayers money where none is needed, completely misunderstands the market and ignores regional and rural Australia.

If Labor can’t even manage a broadband rollout without helping themselves to $5 billion of public funding then every taxpayers must ask, how can you risk Labor with the really big decisions Australia’s trillion dollar economy?

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

As I am sure everyone here is aware, this $2 billion Communications Fund is crucial for regional and rural Australia.

Of course, taking this money out of the bank, 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.

By contrast, the Government remains firmly committed to investing taxpayer dollars where the market does not invest and we will ensure that high speed broadband is available to all Australians, regardless of where they live.

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

We will not pick technology winners.

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

The Government will not waste $5 billion of taxpayer’s funds buying back into a business that private industry has said it will fund itself.

We will not stop at just 98 per cent coverage leaving the neediest Australians in rural and regional Australia without a fast and scaleable broadband service.

We will not be limiting FTTN speeds to just 12Mbps as Mr. Rudd reaffirmed last week.

We will be able to offer affordable and metro comparable prices to all Australians regardless of where they live.

Labor has refused to make any commitment on affordability at all.

We will have a comprehensive but appropriate plan, but not a one size fits all solution.

Our proposal will be fully costed.

Labor’s has been estimated by industry to be out by a lack of $8 billion dollars and likely to cost somewhere in the order of $16 billion.

We will be investing significantly on a new comprehensive wholesale regional network.

We will not be treating rural and regional Australia as some second class backwater that will have to wait until the Labor Party figures out how to go backwards into the teleco business in a highly risky and likely loss-making joint venture and deals with the thorny issues of how to access Telstra’s last mile in a fair and equitable way.

The discussions I have had with all parties, together with the competitive grants process for the Broadband Connect Infrastructure funding have all been invaluable – allowing me to craft a far reaching and comprehensive broadband plan that will make fast, affordable broadband a reality for all Australians, regardless of where they live.

I look forward to making the announcement shortly.

Thank you