Address to CommsDay Summit 2010

Four Seasons Hotel, Sydney
Tuesday, 20 April 2010 

Good morning everyone.

I always look forward to the CommsDay Summit and this event is no different – particularly at such an exciting time in the sector.

Communications Day is required reading for everyone in this sector and your Summits continue to be the place to be to catch up on the latest industry news.

The last time I spoke at a Comms Day Summit last October I had just returned from the UK and Europe.

On that trip, I spoke to a range of policymakers about their plans to transform their own communications sectors, and their impressions and genuine interest about what Australia was doing.

Since then, we continue to see countries around the world making communications policy, and in particular broadband access, a higher order policy issue.

This trend is accelerating.

We now see the UK and US, developing policies aimed to put them on the path towards delivering high speed broadband of 100Mbps to their citizens.

In Finland, we see a variant of this approach with the Government deciding that from July this year every person will have a legal right to 1Mbps, with a view to making 100Mbps a legal right by the end of 2015.

Back here in Australia, it’s been one year since our NBN announcement and things are progressing rapidly.

Delivering this monumental change is now what the Rudd Government is focused on, and the progress we are making should not be underestimated.

Implementation Study

When the Rudd Government announced the way forward on the NBN on 7 April 2009, we recognised the scale and significance of the project.

That’s why, on that same day, we also committed to undertaking a detailed Implementation Study.

I have now received the Implementation Study.

As much as I would like to give this ‘scoop’ to the Comms Day summit, unfortunately I will not be releasing the report today.

As I have indicated previously, the Government will publicly release this document by the Budget on May 11.

This is a detailed and comprehensive document.

It includes advice among other things on the detailed operating arrangements, network design, financial analysis, the structure of the company and the legislative framework around how the NBN should operate.

It is over 500 pages long and contains 84 recommendations.

It is a significant and important document for the future of this sector.

The Government will be considering feedback on the Implementation Study from stakeholders, including industry.

There has been a lot of commentary on the NBN based upon rumours, assertions and politically convenient posturing.

Our political opponents have tried to run several contradictory positions on the NBN.

They criticised the Government for not rolling out broadband faster; but then they called for more studies and delay.

They demand the release of the Implementation Study, but have indicated they will rollback the NBN no matter what it says.

They say they favour a more targeted approach, but they refuse to identify which communities they think don’t need high speed broadband.

This is an opposition determined to run opposition for opposition’s sake.

I know that many people in this room genuinely want the discourse and debate on the NBN elevated to more substantive issues.

I share this view and the release of the Implementation Study will provide an opportunity for more informed discussion.

NBN Update

In the meantime, significant progress is being made on the NBN rollout out in industry and on the ground.

Just two weeks ago, I marked the 12 months since the Rudd Government’s historic announcement and I am pleased to advise that much progress has been made in that relatively short time.

NBN Co is now well and truly up and running as many of you know, with over 150 people spread across offices in Sydney, Melbourne, Hobart and Canberra.

The company is now engaging with industry on a range of consultations, request for capabilities and procurement processes.

The physical rollout in Tasmania commenced late last year, and the first superfast broadband services are due to begin in Tasmania from July.

Stage 1 will connect three communities, which total 4,000 premises.

We are making rapid progress on building the first building blocks of the NBN on mainland Australia.

In February, construction began near Mt Isa on the longest link of this 6,000 kilometre project.

So far, over 500km of fibre has been rolled out by Nextgen under the Regional Backbone Blackspots Program contract.

By the end of April, the total amount of locally manufactured optical fibre cable on order will be around 2,000 kilometres.

The design process is well progressed on all routes.

Land access arrangements are moving ahead and the reaction from stakeholders, including the shire councils along the five routes, has been very positive.

On the services front, Nextgen are in advanced discussions with a range of retail service providers.

These providers have expressed strong interest in acquiring the new backbone services to support their plans to deliver new services to regional business and residential consumers.

NBN Co has also announced the five first release sites where fibre to the premise technology will be deployed on the mainland.

The test sites are:

• A part of the suburb of Brunswick in Melbourne
• An area of Townsville covering parts of the suburbs of Aitkenvale and Mundingburra
• The coastal communities of Minnamurra and Kiama Downs south of Wollongong
• An area of west Armidale, NSW, including the University of New England
• The rural town of Willunga in South Australia.

Each site contains approximately 3,000 premises, except the rural towns where there are fewer dwellings.

These sites will be used to test network design and construction methods and will provide crucial information to assist in the roll out of the NBN.

Work is due to begin on these sites in the second half of the year, with services available from early next year.

When we announced the NBN, it was historic because this investment will future-proof our economy, and drive future growth and productivity.

The Rudd Government is committed to investing in nation building infrastructure in Australia’s long term national interest.

Our investment in a National Broadband Network is probably the best example of that commitment.

In my view, failure to take this step would have harmed Australia’s long term economic interests.

It would relegate our citizens, our small businesses, our schools and hospitals to a patchwork quilt of uncertain broadband opportunities, at the mercy of a failing regime to provide competition and genuine consumer choice.

In many ways, over the last 2-3 years the conversation has changed.

It is no longer about whether we need high speed broadband or substantial reform.

It is about how we can deliver on these objectives as quickly, and efficiently as possible.

Of course, there are people – and always will be – who argue that the NBN is not a necessary step for this country; that people will not need 100Mbps; that the private market can be left to ‘sort it out’ incrementally or that there is no viable economic case for the NBN.

In making these claims people often frame it within current thinking and current market parameters.

However, as we have continually pointed out, the NBN will be the enabling, wholesale-only digital platform upon which the economy operates, innovates and competes in the 21st century.

Any examination of the NBN must also take into account that it will not be a vertically-integrated operator, or a small scale niche provider.

It will be a ubiquitous wholesale-only provider.

The Government expects NBN will earn a utility-style rate of return, rather than the returns expected or traditionally earned by a vertically-integrated operator.

The OECD observed in a recent report that QUOTE:

“A utility-style model may also require lower returns than a similar private investment, thus reducing costs and making rollouts more economically feasible.”

The wholesale-only structure is the centerpiece of the NBN because it will transform the structure and competitive dynamics of the sector.

Twelve months on from our announcement, there has been a range of commentary on the NBN and our commitment to the reforms we have announced.

Therefore, I’d like to take this opportunity reiterate the key principles that the Government remains absolutely committed to.

We remain committed to the NBN being a wholesale-only open access platform.

We understand there is industry concern on elements of our ‘NBN Co exposure draft bill’ and we are carefully considering the feedback before we finalise the legislation.

We remain committed to reforming the existing regulatory regime in the transition to full NBN rollout, including those measures to reform the structure of the sector to deliver genuine equivalence of access and better competition.

These reforms have been held up in the Senate, but we remain absolutely committed to them.

We are committed to ensuring that we put in place the necessary protections for consumers so they can engage with services – including those on the NBN – in an informed and empowered way.

I’d like to talk about this last point a bit more.

I’ve talked about the NBN and about our commitment to our vision for it.

But let’s not forget what the NBN is really all about – to deliver better servicers for everyone - whether in businesses, schools, hospitals, the community sector or individual consumers.

While the establishment of a wholesale-only open access platform will go a long way to driving better outcomes for end-users, we must remain vigilant to ensure that consumers are able to make well informed choices.

Last year, I discussed the poor standard of services being experienced by consumers.

I made it clear to industry members that action should be taken to reduce the volume of complaints received by the Telecommunications Industry Ombudsman.

I have also made it clear that I was prepared to act to improve customer service and consumer protections if the industry did not rise to the challenge.

In the December 2009 quarter, the TIO has recorded a fall of seven percent in the complaints it receives, and this is an encouraging sign.

However, it comes off a very high base, after substantial complaint increases of about 50% per year, for the last three years.

ACMA Consumer Protection Strategy

In his speech later in the conference, the ACMA Chair Chris Chapman will announce a range of consumer protection measures that the ACMA will pursue over the next year.

I welcome this further work from the ACMA as it will play an important role in supporting the Government’s agenda in this area.

Today, I will outline a range of complementary measures the Government is already taking, as well as further steps, including regulatory steps, to improve the consumer issues.

Competition and Consumer Safeguards Bill

While it has been somewhat lost due to the focus on other elements of the bill, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 currently held up in the Senate contains a range of provisions to strengthen consumer protection.

It proposes to strengthen the Customer Service guarantee and the USO and allows for the establishment of new enforceable performance benchmarks.

The enforcement of these standards will be made easier by the ACMA’s new enforcement powers, including the ability to issue infringement notices.

To assist people with life-threatening illnesses, all providers will be required to either offer a Priority Assistance service to customers, or inform them of providers where they can purchase one.

Code Review

At last year’s summit, I announced the Government would review the way that Consumer Codesare developed.

That review is now complete.

One of the findings was that there is tension between consumers and the industry, when it comes to consumer protection.

Industry prefers that consumer safeguards have limited enforceability, while consumers want strong protections that are enforceable by the regulator.

Today, I can announce that as part of our response to that review process, I intend to amend the Telecommunications Act, to give the Minister the authority to direct ACMA to develop an industry standard, where the Minister considers it appropriate to do so.

Unlike a consumer code, a consumer protection standard will be developed by the regulator, who will need to balance the interests of consumers with those of the industry.

It will be directly enforceable by the ACMA and therefore, it will be a more powerful and flexible instrument.

Failure to comply with an industry standard would be subject to civil penalty provisions.

Corporations will be subject to penalties of up to $250,000 and individuals to penalties of up $50,000 for each contravention.

I will also amend the Act to allow for consumer-related Service Provider Determinations to be made.

These will extend consumer protections even further.

The industry code development process is cumbersome and inflexible because there is currently no way that a code can be varied – even for minor or urgent changes.

I will amend the Act to allow for Codes to be varied rather than replaced in their entirety.

This will make Codes a more flexible and responsive to consumer concerns. A new requirement that the code developer must publish submissions will make the process more transparent and the code developer more accountable.

I note that starting in May, Communications Alliance will commence their scheduled reviews of the Telecommunications Consumer Protection Code, and the Mobile Premium Service Industry Code.

This is an opportunity for industry to demonstrate that the co-regulatory framework can work better, and have proper regard for the concerns of consumers.

I have asked my Department, and the ACMA, to work with industry and consumer groups to produce stronger, more enforceable codes under this process.

National Relay Service

Making services accessible is essential for consumers to be able to receive the benefit of communications.

Each year, there are more and more new communications solutions, including mobile phones and computer software, that are improving accessibility for people with disabilities.

I believe a future National Relay Service may provide the right vehicle for Government to support these developing equipment and service needs.

The Service has become a vital communication tool for members of the deaf, hearing and speech impaired communities, providing equitable access to a standard telephone service.

Emerging technologies and applications, along with the potential of the NBN to deliver new applications, provide a timely opportunity to consider the evolution of the National Relay Service.

I am pleased to announce today that I have asked my Department to conduct, in conjunction with the ACMA, a comprehensive community consultation process, to explore the way the Service could be improved and developed for the future.

SMS Emergency Service

Also in 2009, the ACMA conducted a technical feasibility study, into the provision of an SMS emergency service for people who are deaf, hearing impaired or speech impaired.

These communities currently have limited access to emergency services outside of the home when they cannot access a text telephone, or modem, to call the dedicated National Relay Service emergency number, ‘106’.

The study raises a range of technical and legislative issues that would need to be overcome before a service of this nature could be implemented.

However, today I am announcing my intention to establish an SMS emergency service for people with disabilities, and I have asked my Department to address these implementation issues as a matter of priority.

After some years of neglect, the Rudd Government has taken unprecedented steps to reform the communications sector.

Not only are we building the infrastructure to future proof the Australian economy, we are also reforming to ensure the industry has the right structure to maximize competition.

Competition – while important – is a means to an end.

The true measure of our success will ultimately be whether end-users – that is consumers and businesses – have more choice, innovation, higher quality and lower prices.

Government and industry both have important roles to play in providing a quality telecommunications experience for Australians.

We believe that after 2 ½ years, substantial progress has been made in a range of areas.

But of course we are well aware that there is much more work to be done on the path towards our vision.

I welcome the constructive engagement that many people in this room have made to this policy debate thus far.

I look forward to continuing to work with you to improve communications services and to ensure Australians have access to world class communications services.

I also look forward to your feedback on the Implementation Study when we release it shortly.