Report on the National Transmission Network Sale Bill 1997 National Transmission Network Sale (Consequential Amendments) Bill 1997
Membership of the Committee
- Senator K Patterson,
Chairman (LP, VIC)
- Senator the Hon C Schacht, Deputy Chair (ALP, SA)
L Allison, (AD, VIC)
A Eggleston (LP, WA)
K Lundy (ALP, ACT)
R Lightfoot (LP, WA)
- Senator M
Reynolds replaced Senator K Lundy for the consideration of this Bill.
- Senator J Tierney
replaces Senator R Lightfoot for all matters relating to Communications.
- Senator E Abetz (LP,
L Allison (AD, VIC)
the Hon N Bolkus (ALP, SA)
R Boswell (NPA, QLD)
V Bourne (AD, NSW)
B Brown (Aust. Greens, TAS)
P Calvert (LP, TAS)
G Campbell (ALP, NSW)
K Carr (ALP, VIC)
the Hon B Collins (ALP, NT)
M Colston (IND, QLD)
H Coonan (LP, NSW)
B Cooney (ALP, VIC)
W Crane (LP, WA)
the Hon J Faulkner (ALP, NSW)
A Ferguson (LP, SA)
B Harradine (IND, TAS)
J Hogg (ALP, QLD)
S Mackay (ALP, TAS)
D Margetts (GWA, WA)
S Murphy (ALP, TAS)
B Neal (ALP, NSW)
W O'Chee (NPA, QLD)
J Tierney (LP, NSW)
Report to the Senate
1. The Bill
The National Transmission Network
(NTN) is managed by the National Transmission Agency (NTA).The NTA was
established as a separate cost centre and began operating on a commercial basis
about 5 years ago. It is responsible for the technical planning, operation and
maintenance of NTN facilities and has as its objective the cost effective
management of broadcasting transmission facilities.
Late in 1996 the government announced that scoping studies of the National
Transmission Agency were to be conducted. The studies were conducted by Arthur
Andersen Corporate Finance and the communications law firm, Gilbert and Tobin
in early 1997.
On 8 July 1997, Cabinet endorsed
the sale of the NTN. The Bill was introduced into the House of Representatives
on 30 October 1997.
The purpose of the Bill is to facilitate the
sale of the national transmission network and to set in place a regulatory
framework for the provision of national broadcasting and other transmission
services once the sale is completed.
2. The Committee’s Inquiry
The Bill was referred to the
Senate Environment, Recreation, Communications and the Arts Committee on 19
November 1997 by the Selection of Bills Committee (Report No 18 of 1997). The
Committee was required to report to the Senate by the 10 March 1998.
The Committee received 12
submissions and these are listed at Appendix 1. Only three of the 12
submissions opposed the sale of the National Transmission Network (NTN). 
A further three were critical of various aspects of the legislation: Community
broadcasting groups were concerned at possible prohibitive cost increases under
a private regime and wished to see provisions made in the legislation for all
community broadcasters to be ‘nominated customers’ and to enjoy concessional
rates for transmission services from the new private owner.
The Australian Broadcasting Corporation (ABC) had some specific concerns and
these are addressed later in this report.
Although stating that he did not ‘have any problem with the government’s
approach in selling the network to retire public debt’,
one other submission made a case against the sale.
The Committee considered the Bill
at 3 private meetings and held a public hearing in Canberra on 5 February 1998.
Details of witnesses who appeared at the public hearing are in Appendix 2.
The Committee notes that both the
ABC and the Special Broadcasting Service (SBS) commented at the public hearing
that the consultation process carried out by the Department of Communication
and the Arts (DoCA) during the development of this legislation had been very
thorough. They described the process as ‘comprehensive’ and ‘exemplary’
The Committee commends the officers of the department on this consultative
3. The Issues
Commitment to regional areas and community service
In referring the bill to the
Committee, the Selection of Bills Committee was particularly concerned that
national coverage and the existing service commitments to rural and regional
areas by the government funded broadcasters be maintained under the new
legislation. The need to maintain existing community service obligations was
also an important issue.
In his second reading speech, the
Minister stated that the Government was mindful of the need to safeguard
‘important broadcasting policy objectives’:
We have made
it clear that the maintenance of existing ABC and SBS coverage and service quality,
particularly for regional and remote communities, is a prerequisite.
we will ensure that existing Community Service Obligations will be preserved,
including those for network users such as Radio for the Print Handicapped,
remote commercial satellite broadcasting services, self-help retransmission
groups and emergency service operators.
Broadcasting Association of Australia (CBAA) acknowledged in its submission
that the government has provided direct budget supplementation to Radio for the
Print Handicapped groups to enable them to pay access fees and CBAA ‘commended’
the government on its approach..
Self-help retransmission services and remote commercial television services
will also receive benefits such as concessional pricing arrangements and direct
subsidy in order to meet their current obligations. 
Officers of the Department of
Communications and the Arts also told the Committee at its public hearing that
the access regime provisions in the legislation ensured that residents of
remote areas would continue to receive the same level of broadcasting service
after the NTN sale as they were receiving currently:
Dr Stretton-There are two sides to the answer to
that question. Firstly, the access regime applies to all existing assets, so
that the new owner must continue to provide access for those national
broadcasting and other CSO types
of purpose, for both regional and metropolitan areas.
CHAIR-So that guarantees the same coverage?
Dr Stretton-Exactly. Secondly, the contracts which
the various broadcasters and CSO users will have with the new NTC will also
cover off, in detail, a level of service that is expected to be provided at
each of the sites. Those contracts, as you are aware, are for five years
initially, but with the option to renew for two additional five-year periods.
CHAIR-So if I am living in remote New South
Wales or Tasmania or Victoria and I am able to get the service now, I still
should be able to expect to get that under the new arrangement - ABC and SBS, that is?
Dr Stretton-Certainly, that is what the whole access
regime and the development of the contracts is to achieve, yes.
Greater autonomy over
transmission services for the ABC and SBS
The bill is giving more control
over transmission services to the national broadcasters, the ABC and SBS and
enables them to negotiate directly with a service provider to suit their needs.
In its submission to the Committee, the ABC welcomed the Government’s approach.
The ABC went on to state that it wished:
to replicate in
the terrestrial environment the situation it enjoys in the satellite
to be free to
have a relationship with any new owner(s) of the national transmission
facilities similar to that enjoyed by the majority of commercial broadcasters.
In evidence to the Committee,
representatives of the SBS supported the ABC’s stance and stressed that the
sale of the NTN facilities provided them with the ‘more flexible delivery
that they had been seeking for a number of years. Moreover, the SBS witness
SBS does not
want to own its own equipment. We have no particular interest in doing that.
The central issue for the
government funded broadcasters is to ensure that they receive adequate funding
to enable them to continue to provide the breadth and quality of services they
provided currently. Representatives of both organisations were confident that
the compact under negotiation with the government at the time of the public
hearing would enable them to achieve this objective.
Penalties for non- performance
and the non-provision of services
While there are currently no
penalties for non-provision of services or non-performance by the NTA, the new
contracts are expected to contain provisions for penalties to apply if the new
provider (NTC) does not meet its contractual obligations to the ABC and SBS.
The national broadcasters will therefore have guarantees under the new regime
that they did not have previously.
The ABC expressed a number of concerns
with specific clauses in the legislation, one of which was with Clause 15(2)
which, it argued, ‘limits the scope of protected access to national
The ABC’s view was that protected services included in the access regime should
extend to open narrowcasting and ancillary services. SBS also supported the
inclusion of ancillary services as part of the protected access regime.
At the Committee’s public hearing into the Bill, representatives of the ABC
gave the example of closed captioning for the hearing impaired as an ancillary
service that it would like to see included but that is not in the access regime
detailed in the legislation as it now stands.
The Committee supports the
inclusion of closed captioning as a protected service in the access regime.
Committee has considered the National Transmission Network Sale Bill 1997 and
the National Transmission Network Sale (Consequential Amendments Bill 1997) and
is in agreement with the basic thrust of the Bills and their intentions.
Accordingly the Committee recommends:
That the Bill proceed.
That Clause 15(2) of the Bill
be amended so that the protected services included in the access regime extend
to ancillary services such as closed captioning.
Senator Kay Patterson
Minority Report by ALP Senators
The Opposition Senators dissent
from the Chair's report on the National Transmission Network Sale Bill 1997 and
the National Transmission Network Sale (Consequential Amendments) Bill 1997,
and oppose the sale of the National Transmission Network.
We reject the proposed sale
because we don't believe that it is in the national interest, and we do not
accept that the sale will lead to any economic or social efficiencies. At the
public hearing into the bill on 5 February 1998, the Office of Assets Sales and
Information Technology Outsourcing (OASITO) and the Department of
Communications and the Arts were unable to provide specific examples of any
efficiencies that would occur.
It is the view of the Australian
Labor Party (ALP) Senators that those efficiencies which are suggested in a
broader sense could come irrespective of whether it is a public or privately
The National Transmission Agency (NTA) has achieved substantial efficiencies in
the past few years. The Secretary of the Department of Communications and the
Arts, Mr Neville Stevens confirmed to this Committee on 13 November 1997 that
the NTA had expanded the transmission network by about 40% while reducing costs
by about 30% over the last 5 years.
Community Service Obligations
The ALP Senators are concerned
that the community service obligations contained in the bill are much more
limited than those currently in existence. This was recognised by OASITO in
exception of an obligation on the purchaser of NTC to provide sharing and
maintenance of site facilities and infrastructure at pre-determined rates to
some emergency service organisations and existing self-help operators, no
community service obligations will be transferred.
Whilst the legislation ensures
access by community broadcasters and other nominated customers to national
transmission network sites after the sale of the NTA, it does not provide any
guarantees on the issue of charging and access price issues and community
broadcasters are concerned that they will be forced to close down if they are
charged market rates.
Transmission services to rural
areas and special interests
The ALP Senators believe that the
bill contains no guarantees regarding maintenance of services in rural and
regional areas. The provision of transmission services to rural and isolated
areas of Australia is not as profitable as to capital cities and metropolitan
areas and as such must be protected against business decisions aimed at profit
maximisation. The legislation as it stands does not protect the status of
rural areas with respect to new services.
Also, as the majority report
recognises, the legislation has ignored the needs of the hearing impaired.
National interest issues
The Friends of the ABC (FABC)
expressed concern in their submission that the ABC and SBS will not be able to
fulfil their charter of operating in the national interest if their
transmission facilities are owned by either a foreign company or a commercial
interest operating in competition with them.
The Opposition Senators wish to ensure that no impediment stands in the way of
the government funded broadcasters operating according to their charter and in
the national interest and we do not believe that the sale of the National
Transmission Network (NTN) will assist this process.
We are also concerned at the
possible conflict of interest should a commercial broadcaster purchase the
National Transmission Company (NTC). As one of the submissions pointed out, in
the event of a transmission failure, the commercial service would be most
likely restored ahead of the national broadcasters.
Compact between Government and
ABC and SBS regarding funding
The compact between the Federal
Government and the ABC and SBS covers terms and conditions (including
obligations to maintain current transmission coverage and quality) relating to
the transfer of sufficient funding to allow the ABC to purchase its terrestrial
The ALP Senators are particularly
concerned at the lack of information as to the terms of the compact since it is
impossible in the circumstances for the Senate to determine whether the two
national broadcasters will receive adequate funding in order to meet their
current obligations. In particular, we cannot be confident that after the
initial 5 year period the ABC and SBS will continue to receive sufficient funds
to maintain and improve their services.
Retirement of public debt as a
rationale for the sale of the NTN
The ALP Senators doubt that a
reasonable sale price will be realised, and therefore expect that the impact on
the level of the public debt will be insignificant in comparison to the
undermining of our national interest. The national transmission infrastructure
should be recognised as an important element of our national sovereignty, and
should not be sacrificed for the sake of a marginal debt reduction. It is also
worth noting that the Government has not provided any indication as to how much
of the National Transmission Network it is prepared to sell off to foreign
The bill is nothing more than a
capricious effort to sell off public assets for outdated ideological reasons.
There is no regard for the long-term future of national and community
broadcasting, or the delivery of services to rural and regional areas. The
Government has not provided sufficient information in relation to the compact
with the national broadcasters; the anticipated sale price; or the benefits to
the nation. Hence, our recommendation that the bill not be supported.
Senator Chris Schacht Senator
Australian Labor Party Australian
Comment by Australian Democrat Senator L Allison
9 March 1998
The Australian Democrats are not entirely happy with the
Government’s proposed sale of the National Transmission Network. The Democrats
are not opposed to privatisation per se, but we do believe that the
privatisation of any government agency must be done in the public interest.
We do not necessarily believe that the sale of the NTN is in the pubic
interest. While the Government maintains that the transfer transmission
facilities to the private sector will provide the scope for greater client
focus and provide a greater degree of competition, particularly with the
introduction of digital broadcasting, we remain to be convinced.
The Democrats believe that the main reason the Government is
selling the NTN is to retire debt. Debt retirement can be achieved through
We are, however, pleased that the national broadcasters –
ABC and SBS – will be able to gain greater control over their transmission
facilities and engage in a direct commercial relationship with transmission
service providers. The national broadcasters have wanted such arrangements for
a number of years. However, it is also true that the Government could have achieved
this by directly funding the ABC and SBS for their transmission costs and
providing them with the control of the radiocommunications spectrum used to
broadcast their services, without selling the NTN to do so.
The Department did consult with the national broadcasters,
as they stated in their submissions and in evidence to the Committee. However,
the National Ethnic and Multicultural Broadcasters Council and the Community
Broadcasting Association of Australia (CBAA) were critical of the lack of
consultation by the Department. This should be acknowledged.
The Australian Democrats are concerned about national
coverage and customer service obligations to rural, regional and remote areas.
This is an issue for all broadcasters - national, commercial and community.
The Democrats note that commercial broadcasters will be provided with a grant
to operate in declared remote areas. The same grant scheme should be afforded
to the national and community broadcasters.
While the CBAA applauded the Government’s supplementation
for the Print Handicapped groups, they were critical of not receiving a
supplementation or any guarantee of access to transmission facilities. It is
not Government policy to provide subsidies to the community sector. However,
denying them access to transmission by not embracing them within the definition
of “nominated customer” does not acknowledge the importance of community
The Democrats are pleased that the ABC and SBS will gain
more control over the purchase of their transmission facilities, albeit after a
five year period. We are concerned that the national broadcasters are still
dependent on the Government to adequately fund them for transmission
purposes. Perhaps such funds should be guaranteed in the compact between the
Government and the national broadcasters.
We are also pleased that the Committee has recommended that
ancillary services be included as protected services in the access regime.
Should the National Transmission Network Sale Bill proceed,
the Australian Democrats reserve their rights to amend the legislation in order
to provide for their own policy outcomes, and to provide adequate protections
for the national and community broadcasting sectors.
Senator Lyn Allison
Appendix 1 - List of Submissions Received
- Stop Selling Australia
- Mr WD (Darryl) Fallow
- Australian Broadcasting Authority
- Australian Broadcasting Corporation
- Office of Asset Sales and Information Technology
- Community Broadcasting Association of Australia
- Mr Patrick Coleman
- Department of Communications and the Arts
- Australian Competition and Consumer Commission
- Special Broadcasting Service
- National Ethnic and Multicultural Broadcasters
- Friends of the ABC
Appendix 2 - List of Witnesses
Thursday 5 February 1998, Committee Room 2S1, Parliament
Australian Broadcasting Corporation
Mr Ian McGarrity, Head of Development, ABC
Ms Judith Walker, General Manager, ABC Legal and Copyright
Special Broadcasting Service
Mr David Soothill, Director, Communications and Planning
Ms Maureen Crowe, Head of Resources, SBS
Australian Broadcasting Authority
Mr Bob Greeney, Director, Planning, ABA
Mr John Corker, Manager, Legal Section, ABA
Australian Competition and Consumer Commission
Mr Ron Cameron, Director, Telecommunications Policy
Mr Hank Spier, General Manager
Mr WD (Darryl) Fallow
Community Broadcasting Association of Australia
Mr Barry Melville, Policy Development Officer
National Ethnic and Multicultural Broadcasters Council
Dr Heinrich Stefanik, Member of Executive
Minister for Communications, the Information Economy and
Senator the Hon. Richard Alston
Department of Communications and the Arts
Dr Alan Stretton, First Assistant Secretary, Film, Public
Broadcasting and Intellectual Property Division
Mr Alan Edwards, A/g Assistant Secretary, Film, Public
Broadcasting and Intellectual Property Division
Mr Rohan Buettel, Assistant Secretary, Legal, Parliamentary
and Coordination Branch
Mr Vic Jones, General Manager, National Transmission Agency
Office of Asset Sales and Information Technology
Mr Michael Hutchinson, Chief Executive, OASITO