Democrat Senators' Report
Telecommunications (Consumer Protection and Service
Standards) Amendment Bill (No.1) 2000
Senator Lyn Allison
The Australian Democrats wish to
raise a number of matters that arise out of this Bill. As a preface to those
comments, we note that the small number of submissions to this inquiry did not
include comment from any consumer groups.
Guaranteeing the fulfilment
of the USO
Telstra’s submission raises the
concern that, if it does not win the tender to provide untimed local call
access to those in extended zones and another carrier becomes the regional
universal service provider for those zones, it will continue to be the
universal service provider (USP) and will be obliged to maintain its network in
that region as a result. Telstra expresses this concern as follows:
Telstra might have
concurrent obligations with the new regional USP and will thereby remain
obligated to maintain and operate the very network which the successful
tenderer is being publicly funded to replace.
The Department responded to this
concern by suggesting that Telstra’s interpretation of the Bill is incorrect
and Telstra’s obligations to the region would be extinguished. Whilst this
appears to satisfy Telstra’s concern, the Democrats are concerned about the
potential for a situation where, for example, the new regional universal
service provider becomes insolvent and is no longer in a position to service
the area. If Telstra had already chosen to remove its operations and personnel
from the area, how would residents of that area continue to obtain
Some time ago, there was talk of
Telstra being the carrier ‘of last resort’ so that if that type of situation
was to arise, Telstra would be reinstated as the universal service provider for
the area. What funding arrangements would apply in that circumstance? Is it
still proposed that that will occur or would the Commonwealth be forced to
‘prop-up’ an insolvent service provider to ensure residents could obtain services?
Telstra also raised the concern
that the Minister has an unfettered discretion in respect of the declaration of
the universal service provider. Telstra suggested that as a minimum the
Minister’s considerations should at the least be limited to matters which he
reasonably considers to be relevant to the achievement of the objects of the
Act (the Telecommunications (Consumer Protection and Service Standards) Act
1999) as set out in section 9.
The Australian Democrats have a
general concern about handing completely unfettered discretions to Ministers
where such a wide discretion is not necessary. Confining the Minister to
considerations relevant to achieving the objects of the Act would still leave
it open for the Minister to consider a very wide range of matters.
I am unable to think of any
circumstance which a Minister could properly consider which would fall outside
such a limitation. Consequently the Australian Democrats will seek to amend
the Bill to impose that limitation.
Provision of Information by
Telstra (or other ‘outgoing’ USP’s)
Telstra has expressed concern
about the ability of incoming USP’s to require the production of information by
Rather than being concerned
about the nature of the information that is able to be obtained, the Democrats
are concerned about the purpose to which that information may be put. There
are no limits on the use to which the information may be put.
I agree with Telstra when they
suggest that the use of the information should be confined to honouring their
USP obligations. The Departmental response to the concern is inadequate. I
will be making further inquiries on this issue to determine if an appropriate
amendment can be drafted to confine the use of information to matters which
relate to USP obligations.
Ministerial Determination of
the Net Universal Service Cost
The Minister is again provided
with an almost unfettered discretion to set the universal service cost.
Telstra submitted that the power of determination should be limited so that the
Minister must be satisfied, after reasonable inquiry, that the figure he
determines is a reasonable estimate of the figure that would be derived by the
application of a methodology set out in the Act or declared by a disallowable instrument.
The Communications, Electrical
and Plumbing Union (CEPU) said that the determination should be on the basis of
a recommendation by the ACA and if the ACA recommendation is not accepted, the
Minister should be obliged to state the basis for any adjustments to the
The ACA is the independent
industry regulator. During the passage of the Telecommunications Laws
Amendment (Universal Service Cap) Act 1999, the Australian Democrats took
the view that instead of legislating an abitrary cap on the USO cost amount,
the government should have waited for the independent determination of the
ACA. For the same reasons as we took that view, the Democrats are inclined to
agree with the CEPU and believe that whilst the Minister has the final decision,
he should be obliged to provide reasons should he depart from the
recommendation of the ACA.
As a general comment the
Democrats do not necessarily agree that competition is the best method of
achieving better services at lower costs for people in rural and remote
Australia. We are concerned at the prospect of ‘cherry-picking’ – that is,
carriers choosing the potentially most ‘profitable’ areas and tendering to
service those areas – resulting in improvements to services and increased
availability of services to those areas whilst other areas continue to receive
only basic services.
We believe that reviewing and
increasing the level of the standard telephone service through the USO
mechanism may be the best method, at this stage, of ensuring that residents of
rural and remote Australia are not left behind with the continual advent of new
technologies. We are disappointed that the government has not so far agreed to
legislate a periodic review of the USO standard telephone service.
The Australian Democrats reserve
our position in relation to this Bill.
Senator Lyn Allison
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