CNBC Asia - Broadband

JEFFREY JAMES: But first, Senator Helen Coonan is arguably the most powerful woman in this country. As the Minister for Communications, she is one of the very few women in John Howard's Coalition Government, and has been at the centre of the intense battle over the upscaling of Australia's broadband network, bringing her into very direct confrontation with Australia's leading telecom heavyweight Telstra. We know about Telstra.

It is my pleasure to welcome Senator Helen Coonan to Squawk Australia.

Good morning to you, Minister.

Really delighted that you're here. When I presented Newsfront(*) for Macquarie Radio so many years ago, I interviewed you on a number of occasions, and we talked about human rights, we talked about mental health issues, and about women's rights in particular. You were a serious hot shot lawyer in those days.

How do you remember those times in your offices in Phillip Street, Sydney?

HELEN COONAN: Well Jeffrey, first of all, I'm very pleased to join you, and thank you very much. It's great to meet you again. And yes. It was a very long time ago that we first started having interviews, and I think it really just shows that in many respects the world has moved on.

We've got some very, very intense problems, of course, that involve both human rights, and of course, that now terrible tension between freedoms in democratic countries, and the need to protect the population with the constant threat of terrorism.

So I think we've got some very, very significant issues that we've now moved on to in that whole area.

JEFFREY JAMES: We don't talk about women's rights so much these days, as we see women well represented pretty well everywhere in business. But you are a rarefied species in the major halls of power in Canberra, in this country, as government. Why is that. Why aren't there more women in politics here?

HELEN COONAN: Sorry, Jeff. I've just…

JEFFREY JAMES: I was just talking to you saying that, you know…

HELEN COONAN: Sorry, yes.

JEFFREY JAMES: … we're - we don't talk so much about women's rights these days. And you in Canberra are a bit of a rarefied species, really. You're a woman, a very powerful woman at the very top of government. Why aren't there more women, though, represented in the halls of power in Canberra under the John Howard Coalition Government?

HELEN COONAN: Well I think you're very right when you say that we don't talk so much about women's rights in the way we used to many years ago, because I think women's rights have become very much mainstream issues. The sorts of things that concern women concern everybody. And so that's why I don't think there's quite the same focus as there used to be on women's rights.

But I think that there's a body of women in politics who want to be representatives, and they want to be representatives at a community level; there's a lot of those. We've got a lot of very able women in our party.

And from that body of women, a few manage to get an opportunity to actually make a contribution at very high levels. I think that's replicated, really, right across the world where once you get a significant ground swell of people, you get a lot of people to choose from, and then you get people who can make that kind of contribution.

JEFFREY JAMES: Minister, let's talk about broadband now, and Telstra's bid to gain approval to construct what is a massive new system, worth $4.2 billion.

Your Government said, okay. Then they handed the project over to the regulator. Now it's with a special technical committee.

The result has been a Telstra management in fury at your Government, which now publicly backs Labor's broadband ideas.

Phil Burgess threatened on this program a class action legal suit if Telstra did not, indeed, get the green light.

It's all a bit of a disaster, isn't it?

HELEN COONAN: No. It's far from a disaster. What we've had, of course, here, is a very significant privatisation of what has been, really, a dominant telecommunication company. We've got plenty of competition. And one of the issues to do with who will roll out a new high speed broadband network has been on what terms they will do it, and what kind of access prices will be afforded to third parties who want to use the network .

We only have one ubiquitous network in Australia, and it was very important from the future of Australia's telecommunications industry that we simply didn't remonopolise the whole network. So we've got now an expert committee that's going to call for competitive bids, and make the very best decision for Australia. I mean, that's what we really need.

We're a country that depends extremely much on good communications, because we're a long way away, and we think that it is absolutely critical to how you live and work, compete globally, and how you connect our vast country that we have very good telecommunications.

The Government has just recently announced, of course, a new wholesale broadband network for rural and regional Australia which probably will provide the biggest competitive injection to telecommunications that we've seen since deregulation of our sector.

JEFFREY JAMES: How - tell me this. Telstra says it's ready to begin its new broadband network. Of course, G9 says that they're ready to build their own network. Why is it taking so long to reach a final decision?

HELEN COONAN: Well Telstra has refused to build a network unless it can be certain that it has - unless it could be certain as to what its rate of return would be. So it has wanted regulatory certainty, and the Government agrees that it should have regulatory certainty. The issue, really, has been ultimately, at what cost the network will be made available to third parties.

So the access costs will really be the determinant in the end as to whether or not Telstra will proceed. It doesn't want to risk its shareholders' capital unless it can be certain of a particular return.

By the same token, the current competing consortium for the network, the G9, has been very open about the kind of price it will charge competitors to access the network. It says the network should be neutral, available to everybody; it should be an open access network, and that the prices should be transparent.

We agree that that is important; that in the end, for - in the interests of competition, whilst we want to incent [sic] a rollout of this kind, we do have to be sure that it doesn't simply demolish every competitor, because - and ultimately hurt consumers because of the cost at which, eventually, these prices will be retailed.

COMPERE: Minister, good morning to you from Singapore. There has been predictions amongst some analysts that the new media laws will trigger takeovers worth up to some $6 billion. Has the volume of takeover activity so far in the industry, as a result of the new media law surprised you, and are you expecting more [indistinct] to come?

HELEN COONAN: Well, look, the movement in the whole media laws, of course, we have to remember that we haven't changed our media structures for 20 years and, of course, with the advent of the internet, their old structure simply couldn't withstand the kind of changes to media, the need for multimedia, the need for companies to invest, the need for scale and scope, and all of those things were very important, together with the fact that the old free-to-air model is seriously under-challenged.

So they were all the settings under which we looked at how we changed the media laws.

I'd actually predicted that there wouldn't be all that much in the way of cross-media changes. And that's proven to be correct. We've just had our first one, the - announced last week, which was a deal between Fairfax and Macquarie Media to take over some other assets of Southern Cross.

And that involved some very interesting transactions that consolidated on an earlier merger with Rural Press. But the earlier flurry of activity, if that's the right description, was all about foreign investment and private equity. And I think the amount of private equity available late last year and the interest in those traditional media assets was in fact surprising. But it wasn't to do with the cross-media laws, it was to do with the relaxation of our foreign investment laws.

COMPERE: Just a follow up, Minister; do you expect more or less private equity interest in the media industry in the months to come?

HELEN COONAN: Well I think it's come off a little bit, quite frankly. And I think we've seen, with the fall over of our deal, say, with Qantas,

JEFFREY JAMES: Minister, we're now quite tight for time, but I wanted to ask you, you've refused to support the nation's media regulator on its recent ruling against a right-wing broadcaster here called Alan Jones, who was found to have encouraged violence and vilification of Australians of Middle Eastern backgrounds on his national radio program.

Why would Helen Coonan back this kind of shock jock's racial button pushing?

HELEN COONAN: Well, I think you really have to have a look at what was said. I have actually taken the trouble to look at hours and hours - at least, listen to hours of broadcasting, and whilst I think it was open to the regulator on the current ways in which the standard, that is, the industry standard operates to come to a finding, I don't think it really reflects the whole tone of those broadcasts. And it's a matter ultimately for the regulator. There was an arrangement between the regulator and the station that they would undertake some counselling and some education.

I think that that's an appropriate way to deal with it, because when you actually listen to, I think it was 22 hours of broadcasting on this particular topic, I think that there was some, well, there was - it was open to question as to just how these findings could be upheld.

I think the way in which the regulator has dealt with it with the particular broadcasting station has been an appropriate way to take that matter forward and to ensure that it was dealt with appropriately.

MALE SPEAKER: Minister, a final one for me. Do you have any timeframe on when you hope to wrap up the FTTN tender and announce the successful bidder? And do you plan to do so before the federal election?

HELEN COONAN: Well, the expert group is currently meeting. I'd like it to be expeditious and that I would certainly like them to be announcing the timeframe shortly.

I've left it to the expert committee to advise the Government about an appropriate timeframe because we don't know how many competitive bids we'll - we're going to get.

If it is Telstra and the rival consortium, the G9, we know a lot about their respective business cases and what they are proposing.

But I also understand that there could be some other competitive bidders interested in this build and so rather than pre-empt a timeframe, I'm going to let the expert committee receive expressions of interest, settle the draft guidelines and to advise the Government as to what would be an appropriate timeframe.

JEFFREY JAMES: Minister, we've got about 30 seconds left, but I have to ask a question about the election, don't I?

You are a veteran politician having served in both the New South Wales State Parliament and federally. You are now about to run up against Kevin Rudd's Labor. The PM has publicly suggested it will be an uphill battle. Do you agree? How tough is it going to be?

HELEN COONAN: Well, it's going to be difficult. I've only been in the Federal Parliament, in fact, but I have been around for a while. And I have to say that I think that if voters form the view that we run a very good government with a very strong economy - and that, of course, enables a big social and human dividend - that is likely to ultimately prevail, because you cannot change a government in effect without really changing the economy.

And I think that the economy will really be the battleground. We're currently looking at how this all shapes up, but I do agree with the Prime Minister, it will be tough.

JEFFREY JAMES: It is fabulous to speak to you today; thank you very much for your time. Senator Helen Coonan, Australia's Minister for Communications, Information Technology and Arts.