COMMSDAY SUMMIT

I acknowledge the Gadigal people of the Eora Nation as the traditional custodians of this place. I also acknowledge the Comms Day – the Organisers of this Summit.

As Labor’s Shadow Minister for Regional Communications, my focus today will be on the impact of communications policy on regional Australia.

I’m pleased to see that in the wash-up of the last Federal election, there’s a renewed focus on regional Australia.

There’s a new recognition that there are political as well as economic consequences for overlooking outcomes in rural and regional Australia.

On whatever measure you chose there’s a growing gap between urban and rural Australia and that current government policies are doing very little to address the regional inequality gap.

Inequality in wealth, health and opportunity is growing.

If you think the social tension born of rising inequality between city and country is someone else’s problem – think again.

This growing inequality is the parent of political instability. Political instability is disrupting the way policy is made and delivered. You have a stake in it.

Access through mobile devices and broadband has the capacity to be an enabler which reduces inequality throughout all Australia. It is particularly so for people in the regions. 

It’s why Labor put such emphasis on ubiquity when designing its fibre based NBN: we knew then that it was not only a technically more superior option – but that it would be a great force for social and economic change.

The Swinburne Institute’s Digital Inclusion Index 2016, released in August last year, shows that both geography and socio-economic factors play a key role in access, affordability and digital activity in Australia.

Of deep concern is the finding that the overall “Capital-Country gap” is growing, for affordability and ability.

 

Some bad decisions have been made for the Regions

If we know all of this then we have to scratch our heads and wonder about some devastatingly bad decisions which have locked regional communities into second rate infrastructure.

It is not surprising that these decisions have been made by Ministers who live in the inner city.

It is surprising that they have been backed so heartily by National Party.

In conceiving of the National Broadband Network, Labor recognised that the market was not serving regional, rural and remote Australia and action was needed to prevent the regions being stranded on decaying infrastructure.

That’s why, in designing the NBN project, Labor went for ubiquity – fibre optic broadband service in regional towns with more than 1,000 premises – to 93% of premises.

Labor’s NBN would have put regional Australia on a near equal footing with urban Australia.

Messers Abbott and Turnbull trashed the plan. The Nationals could have stopped it. Instead they opted to back in Turnbull’s second rate, copper based Fibre to the Node NBN – with a mobile phone blackspot program funding thrown in as a sweetener for a very bitter pill.

It is a very bad deal for the regions. At $50B the cost is rising but the service isn’t leaping forward. Even if the government changed tack today, regional communities could again miss out.

Here’s why. The NBN is now rolled out to about 70 per cent of regional Australia. They are stuck with the existing technology with slim chance of an upgrade. These communities are stranded with infrastructure unfit for the future. 

 

A Black Spot on Mobile Phone Policy

Our vast landmass makes ubiquitous mobile phone coverage near impossible. Left mostly to its own devices the market has provided coverage for over 90% of the population but only 30% of the landmass.

There are over 10,000 blackspots on the Government’s official Registry in that remaining 70% of uncovered landmass.

The Government is fond of saying that Labor did nothing in this policy area. It is of course not true. In Government Labor had two initiatives:

  • Improving the availability and access to backhaul
  • Utilising the NBN fixed wireless rollout as an opportunity to co-locate mobile services.

In 2010 we invested $250 million Regional Backbone Blackspots Program (RBBP) to enhance the supply of backhaul infrastructure in priority regional locations as well as fast tracking the installation of some NBN infrastructure.

Co-location with publicly funded NBN towers makes sense as the Government auditor (the ANAO) has observed:

…base stations that are co-located with national broadband network (NBN) infrastructure are likely to have lower deployment costs due to the use of established infrastructure, including the tower and backhaul to connect with an applicant’s core network, where possible.

ANAO Audit Report, Mobile Blackspot Program, September 2016, page 48

 

The Government has placed all its focus on a $220 million Blackspot Program whose stated aim is to increase coverage and competition. 

It has had modest success in the first objective and failed at the second.

Although some 500 base stations have been funded in round 1 (mostly in Coalition held seats) not even half of those are switched on.

The ANAO slammed the program in a report finding that 20% of towers funded did not expand coverage. Most were in government held electorates and many of the base stations funded were going to be built anyway.

The government clamoured to defend itself claiming it was all about enhancing competition but the majority of funds went to Telstra – assisting it to consolidate its market lead.

I make no criticism of Telstra in what is perfectly commercial behaviour, but neither they nor the Government can argue that this is enhancing competition.

Labor’s view is that any base station built with public funding must allow  more than one mobile network operator. We also need clearer criteria for funding – such as providing coverage to areas affected by natural disasters, especially where human safety is at stake.

It is critical that we get both coverage and market design right for regional Australia. The imminent arrival of 5G is likely to drive the next wave of innovation and productivity growth in Australia. If regions who have poor fixed line / satellite services are un-serviced they are doubly disadvantaged.

There is big demand and opportunity in mining and agriculture for take-up. Both industry sectors are rapidly incorporating smart technology as drivers of efficiency and market expansion.

I am confident that the big corporations in remote and regional Australia have the capital to look after themselves. They can and will purchase their own satellite and fibre links.

But the small and medium sized businesses are in a different situation. So are the people living in regional towns.

This is an important message to the Government as it contemplates giving a grant or concessional loan to Adani to build a rail link for a coal mine that may not be otherwise viable. You could build a lot of base stations and fibre up a lot of homes and businesses with that sort of money.

 

The Pub Test for Communications Policy

Last week the Prime Minister and the Treasurer suggested the only true test of a successful policy is the Pub Test. Message to Malcolm – be careful of road testing this theory on your NBN policy.

The truth is – there is a big problem at every link in the chain.

Getting connected to the NBN can be a frustrating experience. For too many it is a bad one. Missed appointments, failed connections and workers who don’t appear to have been trained properly to do the install job is just the tip of the iceberg.

It is the same problem with both fixed line and satellite.

Customers are getting bounced between NBN and retailers.

Their RSP tells them that the problem is with the NBN network and NBN tells them to talk to their RSP, and when this goes on in a circle for days, weeks and months a few things happen:

They get pretty fed up with corporate blame throwing.

Secondly they start to tell all their friends about it – and word spreads pretty quickly.

And when they finally are connected and discover that the service that they have is little better than ADSL service that they had before, or when they are sold a 25 MbpS service and struggle to get 12 – or a 50 MbpS service and struggle to get 30……

And the Government’s response is to blame the retailers. People aren’t buying it. This is causing a lack of confidence in the NBN.

It’s no wonder that there’s little demand for higher speed packages – people are suspicious of the capacity of retailers to deliver.

So there are a few messages to Government and industry in all of this.

The customer experience is damaging the brand: not just the Turnbull brand or the Government or NBN brand but the industry.

The framework in place to deal with all of this is just not working.

The Telecommunications Industry Ombudsman (TIO) was established in a different era for a different set of problems.

Its funding arrangements staffing, data collection and public presence are ill suited to the scale of the issues that the public are confronting.

Remarkably the Ombudsman reduced its staff by 25% at the very time that the rollout complaints were doubling. They are expected to double again this year. 

It is also of concern that the TIO is not collecting the data that matters.

For example – with NBN complaints, it doesn’t differentiate between the different technology types.

Remarkably the TIO does not even have the powers to get NBN and Retail Service Providers in the same room to discuss systemic issues.

If you have a look at the top ten postcodes for NBN complaints, they are nearly all in regional Australia.

More than a quarter of new complaints in 2015-2016 to the TIO came from regional and rural Australia, a big six per cent increase.

In the absence of Government leadership community lead bodies are filling the void.

Last week I met with volunteers from Better Internet for Rural, Regional and Remote Australia (BIRRR). They started out as an advocacy group but now spend hundreds of hours (time they should be spending running their farms and businesses) dealing with complaints and helping people in remote communities navigate the Byzantine world of broadband dispute resolution.

 

What needs to be done

There is two years until the next election. In that time we will receive reports from the Productivity Commission is looking at the Universal Service Obligation, the ACCC at mobile roaming declaration and the NBN’s Special Access Undertaking and the Customer Service Guarantee is in need of an update.

We will work carefully through these reviews and respond appropriately – in the public interest and in the interest of ensuring greater equality of access.

There are some things that can’t be unscrambled, but here are a few things that the Government can and should do straight away:

 

  • In the next round of Mobile Phone Blackspot funding the government should ensure that co-location is a condition of public funding and that this is reflected in the tender design and the contract.

 

  • The Government should require that the TIO collect and publish data on complaints by technology type to enable a proper understanding of systemic issues in the rollout.

 

  • The Minister should also increase the Ombudsman’s power to deal with disputes involving consumers, retailers and the NBN.

 

The ACCC announcement that it has secured funding for independent testing of network speeds is welcome. More can be done. For example:

  • If the NBN is aware of deficiencies in its network that limit its capacity to deliver some of its standard consumer packages, then they should be required to advise retailers of these limitations at a customer premises level;

 

  • If the retailers have this information then they should be required to tell the customers of these limitations prior to selling a product

We also know that there are parts of the copper network that can’t deliver these large packages, and yet customers are being sold them. It must stop.

 

Universal Service Obligation and Customer Service Guarantee

It is also clear that the Universal Service Obligation and Customer Service Guarantee aren’t doing the job needed in the internet age for rural and regional customers.

Technology and consumer expectations have changed, so too should our USO.

Why should industry subsidies be directed to maintaining a copper fixed line network in the Fixed Wireless footprint?

The government should commit to a minimum service level that meets the needs of the community in an updated USO.

Australia’s Customer Service Guarantee framework was designed for a time when there was no separation of wholesale and retail services.

A CSG in an NBN era has to acknowledge that Retail Service Providers do not have the capacity to fix services where the network itself is the source of the fault.

Labor is calling on the Government to review the CSG arrangements.

Now clearly these changes won’t fix all of the problems but it is a good start in responding to government failures and consumer concerns.

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