I am delighted to be speaking at the CommsDay Pre-Summit to discuss the very big challenge of how to rebuild trust and confidence in the telco sector.
I want to start by acknowledging Grahame Lynch and everyone at CommsDay for the extraordinary role that they play in this sector – to inform, to question, to challenge – including on the detail. And I saw that last week in Estimates, everything I was raising, it was in CommsDay, and it was very impressive. That’s a publication that continues to really delve into the important issues that I know the sector relies on so heavily. So if you are not a subscriber, please get on board!
Of course, this question comes at a very challenging time for our country. And I think it’s fair to say, particularly in this context, that trust and confidence in the federal government which regulates the sector is at an all-time low.
The fallout from the Federal Budget which, frankly, has caused an uproar across many parts of the economy, particularly in the start-up, innovation and tech sectors, says a lot about the priorities of this government.
I think this has been a shambles of a Budget, complete with a range of toxic taxes to which the Coalition is vehemently opposed and, assuming they are passed, will be repealed by us if we are elected. But of course, it’s seen the New Zealand finance minister take the opportunity – she’s been appearing on television lately from a country where there is no capital gains tax – to shoutout to Australian small businesses, particularly in the tech sector and start-ups, saying where the bloody hell are you!
So I want to make one thing very clear – we cannot have a strong country without strong businesses, where hard work, investment, entrepreneurship and risk are rewarded. And we cannot have a strong telecommunications sector in this country – where Australians are able to access state-of-the-art critical communications infrastructure which underpins the very backbone of our economy – without strong telecommunications companies.
I did pick up last week, as I have previously, that the government appears to take a bit of a different view on these matters.
In Budget Estimates, I was quite taken aback when asking the government regulator to explain its revised spectrum price of $7.3 billion under circumstances where the government has, frankly, shamefully not delivered a dollar of new investment for regional connectivity programs.
And despite denials to the contrary, I suspected and I still do that the government was determined to gouge the telcos to prop up its broken Budget and the message perhaps was heard by the regulator.
But when I raised these concerns, the duty Senator representing Communications Minister, Anika Wells, said at the table, effectively – she accused me of being a cheerleader for telecommunications companies, demonstrating, I think, that many within the Albanese government regard business as the enemy.
Under the Albanese government, it is this sort of approach to the private sector which will drive more Australian businesses offshore, leading to more lost jobs and less confidence in our nation as a place to invest and do business.
That’s not to say that there’s not a big job to restore trust in the telco sector.
The challenges have been far and wide, and I was very loud last year when I was advocating for a Senate inquiry into the catastrophic Triple Zero outage of last September. And of course, we’ve now seen Optus take a lot of responsibility – they were pretty humble in relation to their liability for what occurred. Because Australians must know that when they do dial Triple Zero, this is an emergency call service which will work in times of emergency.
We just heard the reference to the Bean review and the recommendations of the Bean review. But one of the really important recommendations was that the government review the entire regulatory and legislative sector which underpins the Triple Zero emergency call network and that took two years to make that decision.
So that work is now underway but that’s probably going to take at least another 12 months before we see the outcome of that review. And as we know, when it comes to emergency calls, time is of the essence.
We’re also pretty concerned, despite our Senate inquiry into the outage, that ACMA’s investigation is likely to take some 12 months. We can’t access any of the documents relating to its investigation. And given Optus’ admissions and the Schott review, where I think Kerry Schott was very candid about Optus failings, it is surprising that we have not seen more from the regulator on that front.
Of course, the sector has also been hit by a number of very high-profile data breaches which have compromised personal information, sparking intense scrutiny over how telcos store and protect sensitive customer data. And I have to say, the 3G shutdown has left many people in regional communities with no or poor mobile service that they could previously access. There has been a huge spike in complaints with a loss of confidence – and many Australians in the regions are saying: how could the rollout of so-called improved connectivity make things worse for them?
The lack of confidence in the sector has not been helped by recent significant increases in mobile plans, which has drawn severe criticism. And I have to say it comes within a landscape that for about ten years, Australians were conditioned to expect their phone and internet bills to either stay flat or even get cheaper.
So alongside falling or steady prices, consumers during that period from 2014 to 2022, received expanded services during what was almost a decade of deflation, obviously underpinned by very substantial government investment, including in programs like the Mobile Black Spot Program. So these sorts of price hikes, even minor ones, now really sting because cost of living pressures are rising across the board, and because they occur against a backdrop of this historical trend of telecom deflation.
I understand this reversal has a number of drivers but there is no doubt that the federal government’s failure to control inflation through responsible spending restraint has had a massive impact on telco overheads since the government was elected. And of course, Australian consumers, when it comes to cost of living, are really paying a pretty high price.
So while telcos in a number of important respects need to do better, so does the government.
I want to particularly raise deep concerns about the Budget and the government’s decision not to include any new funding for regional communications.
On that Tuesday night, when I opened the Budget papers and scrambled around to see what sort of investment would be delivered, I was shocked to see that it was zero. And in fact, under the Better Connectivity Plan, some $111 million was repurposed – read cut – from the government’s budget and that was redirected. And of course, again, we see regional communities pay a very high price.
So programs like the Mobile Blackspot Program, which have been so pivotal in driving co-investment in regional communications infrastructure in parts of the country where, arguably, it’s not otherwise commercially viable to invest in those communities, are now being phased out as the government would say. I would say axed.
And this is compounded by the decision of the minister to even fail to find the funding for a great small program, the Regional Tech Hub, which has been delivered by the National Farmers’ Federation, another proud Coalition initiative, at only $2 million a year. Last year it supported some 28,000 regional Australians navigate internet and phone connectivity options, which are sometimes extremely complex in more remote parts of the country.
And so I think, all in all, the Coalition and myself, as the shadow minister, we were really shocked by what we saw in the Budget.
Instead, it seems that the government is now looking to the Universal Outdoor Mobile Obligation, putting all of its eggs in the satellite-connectivity basket to deliver for regional communities. But I have to say, I think the UOMO Bill, which is still before the Parliament, presents a very major reputational risk for telcos.
And why is that? Because the government, in the Bill, is saying Australians will get universal outdoor mobile connectivity by the 1st of December 2027. The only problem with that is that technology does not currently exist. So that puts the telecommunications companies in a very invidious position.
Now we held a Senate inquiry into the UOMO Bill and we did hear from the likes of SpaceX that they hope, in an agreement with Telstra, to have their second gen voice calls delivered via satellite technology up and running by the end of the year.
But there is enormous uncertainty in relation to the UOMO Bill. I’ve never actually read a piece of legislation like it. It’s an aspirational framework. It reads more like a press release than a Bill which presents clear deliverables. I am deeply concerned that the government is actively misleading Australians by saying that this is going to change the landscape when the government knows only too well that the technology does not currently exist.
And then, of course, there is a question – Telstra is offering text messaging via satellite at the moment but there is no Triple Zero capacity. So that is not up and running which of course has the potential to lead to greater confusion for consumers who think that they’ve got a connection and can text anyone – oh except Triple Zero in a time of emergency.
All I can say is that there are many critical questions remain about this Bill and I think it’s deeply regrettable that the government has not done more heavy lifting in terms of making sure that when it makes a commitment to Australians, that this is a commitment capable of being delivered.
Now, we don’t dispute or argue with the intent of the Bill.
I recall probably more than ten years ago saying to a former CEO of Telstra, I had this great dream that one day every Australian will be able to use their phone and connect, no matter where they stand in this great country. I think that was met with some scepticism.
The landscape is dramatically changing. But for the government to present this Bill in the lead up to the next election and to say we’ve delivered – and then, of course, frame this legislation in a way which will then arguably allow it to blame the telcos – is highly irresponsible and fundamentally misleads Australians.
So this Bill is before the Parliament. It’s going to be debated again in the House on Thursday and we have deep concerns about the very big difference between the aspirations in this Bill and what it will deliver in practice.
We do believe much more can be done right now. Temporary disaster roaming, mandatory domestic roaming to improve connectivity in the regions including during times of disaster.
The UOMO Bill is silent on those issues. And while the government is working with the telcos on rolling out temporary disaster roaming, there is no certainty.
It appears it’s going to be an industry-led scheme, rather than providing Australians living in areas of high fire risk, for instance – and I come from one of those areas in south-west Victoria where there’s been many catastrophic bushfires. There is no certainty and there is a very big question mark as to why the government has not legislated, at the very least, in relation to temporary disaster roaming.
I also believe there does need to be a serious re-examination of the ACCC decision in 2017 that mandatory mobile roaming would stifle investment in regional communities. There’s a lot of evidence now to the contrary and we heard that during our Senate inquiry into the Bill.
TPG supports it. Optus is pretty quiet. Telstra is a bit more fiercely opposed to mobile roaming. I get it. I understand why the telcos have different views. But I think the failure to seriously examine mandatory mobile roaming is a real policy failure and we just can’t operate on a wing and a prayer, particularly when this landscape is changing so dramatically.
I am very committed and passionate about equitable access to communications across this great country. There’s no other country like it, a vast continent with a relatively small population. The challenges are immense but we recognise that access to reliable telecommunications, no matter where Australians live, is not a luxury. It is a critical service which underpins safety, economic activity and social participation.
I also want to make a few comments about spectrum licensing.
So I recognise the ATA has raised some pretty big concerns about ACMA’s ask and Luke, in a press release that the ATA released, said that when telcos are forced to overpay for spectrum it means they have less money to invest in mobile services. “Every dollar spent on spectrum is a dollar that can’t be spent on better coverage, faster speeds and more resilient networks. It’s that simple.”
Of course, ACCAN takes a pretty different view. It’s argued that mobile network operators should step up and fill that gap. And in the consumer survey – and there’s some controversy about ACCAN’s surveys- it spoke about the strong support for government to introduce requirements for mobile networks to improve their reliability as a condition of spectrum licensing which is a priority for consumers. ACCAN said “… against the backdrop of stagnating investment in regional infrastructure, licence conditions on telcos provide an opportunity to drive the investment in mobile coverage and reliability that regional, remote and rural Australians need to live and work.”
Again I return to the UOMO Bill.
The UOMO Bill gives the minister the power to set reliability standards, to set standards in relation to pricing but none of that work has been done. And so the government is asking us to pass a Bill where so much of the grunt, the policy grunt, is actually in the legislative instruments not before the Parliament.
And I have real concerns that the Parliament is not being asked to play a much greater role in oversighting the detail when it comes to these sorts of obligations.
So we’ve got lots of competing priorities. We’ve got a very complex and fast-moving landscape. We’ve got huge question marks about changing technology and we have got many unanswered questions with much uncertainty.
I have to say, I think there is a real policy vacuum at the moment by government. That is making things tougher for telcos, not easier, making it more difficult to protect the reputation of telcos and to make sure that everyone involved in this sector can plan for the future.
And so I would say to the minister – where the bloody hell are you?
Because the sector deserves policy certainty, the sector deserves to know what government’s expectations are. The sector deserves to know what investment is going to flow now and into the future. And so many of those questions are not known.
So I recognise that while telcos have got a big job to restore trust and confidence, the government has a very large role to play in that. And there’s been some very significant policy failures in that regard.
So for me, back in the portfolio as the new shadow minister, we recognise we’ve got a lot of work to do. And I really look forward to working with all of you to make sure that we get the settings right as we move forward, to give you the confidence and the certainty that you so deserve.