Central Planning : Soviet Style GozPlan Telephone Set – string attached to tin can

Trujillo is a rare type, an entrepreneur who heads a major company in Australia with the spine and the nerve to stand up to National Socialist Politicians. The politicians in the Liberal Party seem to be hell bent on securing what the ALP openly states as its aim, to reduce Australians to serfdom under the hellish joke of National Socialism. The politicians, all parties, apparatchiks, and those selected vested interests who are the beneficiaries of central govt. corruption of markets through taxation, transfers and other interventions, are at once furious and flabbergasted Trujillo has the nerve to stand up to the socialists – all parties.

When Trujillo first attacked regulations applied to Telstra, the response of the Cabinet was: Trujillo should shut up: it is the job of govt. to set economic directions and goals and businessmen are to merely execute them through the actions of the companies they run. Whether the ‘practical men and women’ of the Coalition realise it or not, it was just that sort of Central Planning garbage that laid the foundations for totalitarianism in Europe, in particular, Nazi Germany. The trouble with Trujillo is not his standing up to the politicians, apparatchiks and bureaucrats, it is that he does so alone. His gutsy fight is a blunt contrast to the gutlessness, the cowardice of so many others who while they moan about taxation and regulations don’t do something about it as in, standing up to bloody usurious politicians and bureaucrats who are nothing more than thuggish goons.

Regulation is a number of things: It is a tax. It compels firms to cash in capital to comply. It cripples the capacity of entrepreneurs to run firms to markets. It has issued in the rise of bureaucrats in firms who aren’t decision-makers, who are a dead weight on companies but are kept on payroll only because of regulation. It is a barrier to entry into markets. It eliminates what comparative advantage remains in producing goods in Australia. It eliminates the freedom to work capital. It compounds the destructive force of the sheer evils of the tax regimes of each tier of Govt. in Oz. It entails the establishment of goon squads falsely called public service agencies and more goons falsely called public servants. The majority of regulations include criminal offences, which strengthens what regulation serves, the overthrow of the Rule of Common Law for the law of the Tyrant. Regulation, in return, serves nothing at all, not firms, not employees, not consumers, not anyone except politicians and bureaucrats bent on tyranny. Just look at Brackistaniland and the Bracks Junta.

 Look at the now increasing flight of capital out of Victoria alone. One upshot is, regulation does turn profitable ventures into loss making close it down now propositions. So, for the time being, apart from making a couple of additional remarks, the rest of this post is reserved to a number of telling speeches and interviews by Senator the Hon Helen Coonan Minister for Communications, Information Technology and the Arts.

Remarks: several years ago, I remarked Telstra is a bad investment and for several reasons:Sovereign risk, realised and crippling Telstra’s capacity to allocate capital and accumulate capital. The fact that the politicians, all parties, saw T2 nothing more than as a slush fund for their squander, as they also view T3, and not the proper function of capital raising which is precisely soundly justified increase in capital for the purpose of Tesltra’s market guided, entrepreneur driven investment in production of goods and services.T2 was not a sound capital raising and the immediate implication was investors’ shareholdings were debased, and not simply diluted by useless paper. I always considered those who purchased T2 silly and worse, fools because: The T2 issue was not based on and priced to Telstra’s internal capital raising but nothing less than the envy of politicians, all parties, that some lucky T1 holders had sold at prices higher than the issue price of T1, overlooking that the then share-trading prices were somewhat driven rather more by optimism as in – Telstra is a big blue chip company; thus, its price could only keep going vertical.

Well, it can go vertically down too, as it did. Then, the object of T2 as also T3 can be summed up as: Stuff Telstra, investors and customers: We dah Govt. – pollies, bureaucrats and mendicants want your loot so we can play Santa Claus and enjoy ‘free boondoggles’ – Harradine lead by rapacious example.

Now, without `T3’, the amount of issue is still overvalued. That the price has been still falling up to the announcement of T3 is bound up with it. T3, the issuing of what it amounts to, nothing more than very expensive toilet paper, will see the price fall at even lower ranges than it might otherwise bottom out around . Trujillo can’t reverse Tesltra’s fortunes unless Parliament and bureaucracy remove their grubby hands out of Telstra, and rescind regulations, and free markets, – for once in their miserable National Socialisto parasitical lives.

Coonan seems to believe her grand Socialisto plan will deliver great boondoggles to not only Tesltra shareholders but also customers. Well, she is a fool, a liar, or just a complete economic ignoramus, or all three. For strangling markets and firms, Coonan, won’t deliver super-dooper telco products and services: what it will ensure is Soviet style goods and service – crap products, and a goon squad approach to services.

Moreover, customers, instead of being able to purchase improving goods and services for less, will pay higher and higher prices for crap. Indeed that is what the national Socialist approach to telecommunications, and broadcasting for that matter has done to telecommunications, and consumers are in for a real shock, including those selfish, venal self satisfied –give me my ‘free’ subsidy’ voters.

 When T1 was floated, that should have been the end of ‘govt.’ control. The floating of Telstra is worse than a dirty float. T1 should have been the completion of the floating of Telstra. Instead, all the parties, rather many politicians, apparatchiks and bureaucrats have done nothing less than defraud investors. With this, they are imposing Soviet style telecommunications supply. Thus, the black irony is, contrary to the claims of Coonan, cabinet, ms. of p. all parties, customers will be the losers.

To point things out a bit more: Tesltra is not a monopoly. As Trujillo has also observed, prices of goods and services are on a long run trend down. Consumers, in some will have, sooner or later, what they seek, but they won’t get it from firms in Australia crippled by regulation and markets totally corrupted by interfering National Socialist spivs playing at entrepreneur – and Coonan seems deluded that she is really and truly an entrepreneur delivering great things to consumers, as her speeches show. She has no clue at all.

That the ALP is no better, that they are worse is no excuse for what the ‘practical men and women ‘ of the Liberal party. As for Coonan, her speeches could be mistaken for those of 19th century central Planners whose grand schemes issued into totalitarianism and the immiseration of millions. She is thick.

Trujillo has an uphill battle, but, slim as the prospect is, I hope he wins. It is time for many more to do what Trujillo is doing, give the pollies and bureaucrats a kick in the groin. In the meantime the politicians persist in corrupting and eroding another range of markets and persist in ensuring Telstra will end up a tiny messenger service firm. Coonan Speaks, blah. 22 August 2006

Content safeguards extended to mobile phones

New safeguards to protect consumers from inappropriate or harmful material delivered over 3G mobile phones and similar devices will go a long way to protecting children from incidents such as those reported in today’s Daily Telegraph, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, said today. “However, while the Government will take every measure possible to protect children using new technologies, parents and educators must remain ever vigilant to ensure children are safe,” Senator Coonan said. “Like the Internet, increasingly sophisticated hardware such as mobile phones can be a vital communications tool, but in inexperienced hands they can become a pipeline for perversion. “Recognising the challenge that next generation mobile phones pose for regulating content which may be offensive or illegal, I will shortly put in place new safeguards to protect consumers when they are using 3G mobile phones and subscription based Internet portals. “I will soon introduce to Parliament legislation to extend the current safeguards that apply to content delivered over the Internet or television to content delivered over convergent devices such as mobile phones. “This will include prohibition of content rated X18+ and above, as well as requirements for consumer advice and age-restrictions on access to content suited only to adults. These prohibitions will be backed by strong sanctions for non-compliance with the new regulatory framework, including criminal penalties for serious offences. “To complement these measures the Government also recently announced the $116.6 million Protecting Australian Families Online package which, among other measures, will provide every Australian family with a free Internet filter or a filtered service on their home computer. “There will also be a comprehensive information campaign to help educate parents about how best to keep their children safe when using the Internet and technologies such as 3G mobile phones. “These initiatives show how seriously this Government takes the issue of protecting children from inappropriate and offensive content and helping parents to understand and deal with these devices in the hands of their children. http://www.minister.dcita.gov.au/media/media_releases/content_safeguards_extended_to_mobile_phones

Telecommunications regulatory reporting review

The Australian Government has commenced a review of telecommunications regulatory reporting with a view to identifying opportunities to streamline reporting and remove redundant or unnecessary industry reporting requirements, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, said today. The Government is also examining the industry’s regulatory reporting requirements to the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC). The review was a recommendation of the Taskforce on Reducing the Regulatory Burdens on Business (the Banks Report). “The full range of regulatory reporting obligations on the industry, including Telstra as well as other carriers, is being examined,” Senator Coonan said. “Regulation is sometimes an inevitable part of achieving important Government policy objectives, particularly where there are competing social and economic interests, but the more we can do to reduce the burden of unnecessary red tape the better. “The Taskforce has been a significant, worthwhile and timely initiative on the part of Government. “I have already asked ACMA and the ACCC to examine and report to the Government on opportunities for rationalisation or reduction of regulatory reporting requirements by the industry. “I have requested a report from both regulators when a comprehensive assessment has been undertaken outlining any recommendations for regulatory change identified. “I am confident that this process will identify opportunities to reduce the reporting requirements on the industry, consistent with maintaining an effective flow of necessary information to the regulators. “Even at this early stage, ACMA has advised that it has recently reviewed and substantially reduced reporting requirements under Section 105 of the Telecommunications Act 1997.” Two other recommendations from the Banks Report relate directly to regulatory matters within my portfolio. “In response to Recommendation 5.59, I have announced a review into the policies and regulations that underpin the operation of the .au Internet domain,” Senator Coonan said. “The .au domain has been operating under industry self-regulation for five and a half years. In that time, the Internet has grown significantly in both economic and social importance to Australians.” “As with any industry self-regulation, I feel it is now appropriate to conduct a review to ensure policy goals continue to be met and that the .au domain continues to be administered efficiently, effectively and in the best interests of all Australian Internet users,” Senator Coonan said. “In response to Recommendation 4.45, the Government will request ACMA to consult with carriage service providers on the application of the Customer Service Guarantee (CSG) as it relates to enhanced call-handling features, and report back by 30 November 2006. “This will build on reviews of the CSG in 2001–02 and 2004, and will ensure that the CSG remains relevant to the ever changing telecommunications environment in Australia.” Further information on the Taskforce and Report can be found at www.regulationtaskforce.gov.au/index.html Minister for Communications, Information Technology and the Arts

Deputy Leader of the Government in the Senate

Connecting Australia: Fresh Opportunities

Address to Australian Financial Review National Infrastructure Summit

Melbourne 23 August 2006

Introduction

Thank you. It is a pleasure to be here today. This summit brings together the many industry sectors that contribute to our national infrastructure. And I am very pleased that communications infrastructure has been added to this year’s agenda. Technology and broadband in particular play a vital role in national and regional development in Australia. Broadband is changing the way we work, the way businesses interact in the global marketplace and the way essential services such as health and education are delivered. It is improving productivity and contributing to our economic growth. One report suggests that next generation broadband could produce economic benefits of between $12 and $30 billion per annum. And that is why the Australian Government is devoting considerable resources – $1 billion to date and a further $3.1 billion proposed – to the rollout of advanced communications services around Australia. There can be no argument that broadband infrastructure is critical to Australia’s future prosperity. It must be a national priority. Today I want to look at the changing nature of the telecommunications infrastructure debate in Australia, how the Government is leading the way in developing a strategic national approach to infrastructure rollout and how we plan to meet future challenges.

Australia’s challenge

It has been said that broadband is a tale of ever increasing bandwidth. This is not a ‘set and forget’ policy exercise particularly as we cannot imagine the services that will be available or what consumers will be demanding in five years time. Rather than trying to shoot a moving target by picking technologies and lumping Australian consumers with the network of the moment, we do need to take a strategic, national view of the broadband challenge. My objective is for Australia to be a world leader in the effective use of broadband. My vision is to drive next generation broadband capability to underpin Australia’s social and economic future. And the Government has equitable access to telecommunications services for all Australians at the heart of our considerations about how best to connect Australia. To achieve this will require more than just ambitious targets. The starting point for looking at where we are at and where we need to get to requires recognition of a few fundamentals. Australia does have the unique challenges of a relatively small population, difficult terrain and many scattered and remote communities to connect. Unlike many countries – such as the US, UK and Canada – at present there is no effective competition in access infrastructure to the home. Canada is often nominated as a country that has successfully confronted many similar geographic challenges that Australia faces. However, it must be pointed out that Canada has enjoyed competitive tension between three large cable companies and several telco service providers. In contrast, Australia’s incumbent telco still occupies a dominant position as the owners of the copper wire access network as well as an extensive HFC cable network and a 45 per cent share of the mobile market.

Misconceptions about broadband

The broadband debate in Australia has, recently been too focused on Telstra’s proposed $4 billion Fibre-to-the-Node deployment. This has resulted in a number of misconceptions about the true state of broadband in Australia. The reality is that high speed broadband is available to a significant number of customers that live or work in the footprint of the proposed FTTN network – which was to have been the most populous areas of the five major capital cities. And high-speed broadband in Australia is not reliant on only one carrier. At least nine service providers already offer ADSL 2+ in the capital cities and major regional centres at very fast speeds. Pay TV cable networks pass around 2.7 million premises in major capital cities and offer data speeds of up to 17 megabits per second. Some telecommunications experts estimate that at least 55 per cent of Australians already have access to very fast fixed broadband today via either ADSL2+ or cable broadband. And where cables don’t reach, in many areas wireless broadband services are already offering speeds at up to 2 mbps. Wireless broadband services are available to almost 6.5 million premises including around 835,000 premises with no access to ADSL. Wireless standards are continuing to develop and evolve, with increased range and bandwidth the hallmarks of each new generation wireless technologies. For example, the WiMAX forum has indicated that wireless broadband speeds of 12 mbps or more are expected to become available in the near future, with further developments to come. And beyond even wireless’ reach, satellite services provide broadband Internet access in even the most remote locations. I acknowledge there are people who experience difficulties in getting access to adequate broadband services and this must be addressed. Through the $878 million Broadband Connect package and its metropolitan equivalent – Metro Broadband Connect, we are working to overcome these issues. We do know that Telstra’s new 3G wireless platform is proceeding apace and that in the future, Telstra may turn on its ADSL2+ technology that has been installed in many of its exchanges. Both of these developments will assist a greater number of Australians to access fast broadband. Despite the hold on fibre-to-the-node, both Telstra and its competitors continue to have the opportunity to build on their own next-generation networks. It is these networks that will continue to provide choice and lower prices for consumers. This is why ULL pricing is clearly such an important issue. As any realistic proposal for a fibre network will begin – and in some cases end – in metro areas, the ULL is critical in continuing competition and service delivery for regional Australia. While not full facilities based competition, the ULL does mean that competitors are not locked into resale only, and are able to differentiate their service and offer new pricing constructs. The ULL is an important building block to full infrastructure based competition. In fact, with plans for fibre to the node realistically only being rolled out to inner metro areas in the foreseeable future, the ULL will continue to deliver for outer metro areas and larger regional centres.

Is fibre the be all and end all?

While fibre-to-the-node would have been a welcome development in the Australian telecommunications landscape and may yet still be rolled out, it was not necessarily the silver bullet for better services for all Australians. I have always advocated taking a technology neutral approach to encouraging investment in infrastructure in Australia. For it is likely that a mix of technologies will be needed to deliver all Australians high speed services. I think few people would disagree with the proposition that fibre is unlikely to be rolled out to our most remote communities in Australia. I would be very glad if someone proves me wrong. However, people living in rural, regional and remote Australia – and those in our outer metropolitan areas – should be heartened that technology, competition and targeted investment by Government are helping to deliver the services they need today and will continue to deliver the services they want and need tomorrow. Extending fibre into the local loop to enable higher bandwidth services is not a new issue. For example, Telstra flagged plans to replace its copper local loop with fibre optic cables as far back as 1979. Ultimately it is highly likely that the copper network will be fully replaced with fibre at some stage. This is because the very high capacity of fibre will be necessary as more and more higher bandwidth services and applications come on stream. However, it must be said that fibre is only one way to deliver higher bandwidth services. I have said previously that while Telstra’s investment in fibre would have been welcome, it does not spell doom for broadband in Australia. While fibre has been either considered or rolled out in several countries, it has not been an unqualified success. South Korea is often quoted as an example of the success of a fibre roll-out. It is useful to point out that the Korean Government made a significant investment in the rollout – to the tune of $40 billion over 12 years. Despite the ubiquity of fibre, in December 2005 Fibre-to-the-Home accounted for only 8.7 per cent of total broadband subscriptions in South Korea. In the United Kingdom British Telecom (BT) has done some trials of Fibre-to-the-Premises (FTTP) infrastructure commencing in September 2005. However, very few homes are estimated to have access to FTTP (about 34,000) by the end of 2006. This confirms the findings of UK regulator Ofcom’s Strategic Review of Telecommunications which showed very low interest in fibre by service providers. BT has now indicated that fibre will only be considered for deployment in new ‘green-field’ developments. In fact, if you look at the OECD statistics for the provision of broadband services, you will see fibre is still a very small proportion of the total. The majority of services are being delivered by DSL and by cable. While cable subscribers outnumber DSL in Canada and the US, DSL is still the leading platform in 28 out of the 30 OECD countries. And in the case of DSL, ULL is playing an increasingly important role in spurring on better service and price options. Detractors often unfairly compare Australia to countries that differ socially, economically and geographically – thereby comparing apples with oranges. For example, North East Asia and Singapore Governments have taken a very interventionist approach to rolling out next generation networks. These markets are very different to Australia. They have high population density and are high wealth countries that have invested significantly in networks and place significant obligations on carriers without distorting the budget bottom-line or the market.

The new way of thinking

A positive out of the FTTN debate then is that it has helped refocus attention on the important issue of broadband availability. But I want to reframe the debate around the real issue. I want to encourage a paradigm shift in the way we think about broadband and the broadband market. This shift is partly driven by the evolution in technologies and partly driven by the increasing sophistication of consumer’s needs and expectations. On the technology side there has been a fundamental change in the structure of the market because of the digitisation of networks and the move to IP based technologies that provide for simultaneous transmitting of voice, video and the Internet. It has meant that the ability to supply an end user with a service is no-longer directly tied to the control of the network – as was the case in the PSTN world. There are three vital elements to the evolving broadband market:  physical infrastructure– which provides the access network including the civil infrastructure such as ducts as well as fibre-optic cables;  connectivity – which lights up the fibre and manages the routing of traffic; and  services and content, which embodies the applications which consumer use, including access to the world wide web, movies, entertainment and other services such as VoIP telephony. We should start to look at the implications of this for both policy development and industry structure so that new network investment encourages the take-up of broadband across the nation. In our earlier discussion papers and in the recent Broadband Connect Expressions of Interest process, the Australian Government defined some of the key principles of a national broadband blueprint. The concept of a strategic national approach is being used to guide the development of the Connect Australia package – the most significant investment in telecommunications in this country’s history, including how best to create a new wholesale access network. These include consideration of: long-term sustainable investment in scalable telecommunications infrastructure;

  • A more coordinated and strategic approach to infrastructure investment;
  • A competitive wholesale access network in regional Australia;
  • A consortium approach combining strengths of different partners; and
  • A vision for large scale transformation for national and regional social and economic development.

It became apparent during the early stages of the Connect Australia package that the Government needed to take a new approach to the provision of communications infrastructure. Having said that, the Higher Bandwidth Incentive Scheme or HiBIS had been incredibly successful and the per-customer subsidy model has been partly continued in the first phase of Broadband Connect. This model has already delivered considerable results for regional communities, including:

  • over 1000 additional rural and regional exchanges enabled with ADSL equipment – enabling customers to access services up to 1.5 megabits per second;
  • encouraging a competitive telecommunications environment that has seen a large number of new wireless providers offering services to rural and regional consumers, some well into the megabits per second range;
  • increased competition in the Australian satellite broadband market that has seen prices for two-way satellite services drop as low as $29.95 per month;
  • the connection of more than 160,000 customers to either a HiBIS or a Broadband Connect Service; and
  • more than one million additional premises gaining access to terrestrial broadband.

The $50 million Metropolitan Broadband Connect operates on a similar premise. Metro Broadband Connect is assisting people in unserved areas of our major cities to access broadband services at comparable prices and service levels to those enjoyed elsewhere in those cities. Part of the problem in outer-metropolitan areas is the difficulty posed by pair-gain systems and diminishing quality of service the further a person lives from an exchange. Metro Broadband Connect acts as an incentive to providers to overcome the technical challenges to the provision of broadband in these areas. But while these programs are encouraging providers to connect Australians living in outer metro and rural and regional areas, there is a need to think beyond the per-subsidy model. Where the market delivers services we should let it provide the driver for broadband delivery. However, where the market will not adequately meet the needs of consumers there is a case for targeted Government investment. In particular, we need to encourage the rollout of scalable infrastructure in areas of market failure to drive broadband take-up. To achieve this, the Government is working in partnership with industry and other key stakeholders to encourage a more targeted, sustainable and innovative approach than is likely occur through market forces alone.

Connect Australia

The principles I mentioned are being applied across all elements of the $1.1 Billion Connect Australia package – and particularly the $878 million Broadband Connect program. To achieve the best bang for our buck – so to speak – the Government is working in partnership with industry and other key stakeholders to redefine our approach to targeted Government investment. We are creating linkages between the various complementary elements of the Connect Australia package to ensure we are taking a more holistic approach to encouraging investment and rolling out telecommunications services. For example, the $878 million Broadband Connect program will primarily target the infrastructure required to provide all Australians access to affordable broadband. The $113 million Clever Networks program, will be directed more towards higher speed advanced networks and applications targeting health clinics, emergency services, schools, TAFE colleges, homesteads for distance learning and universities. However, there are clear synergies between both these programs as well as linkages to the $30 million Mobile Connect program. We should not be looking at the various needs these programs are designed to address in isolation. A consortium approach is being adopted to encourage collaboration and partnerships to deliver sufficient scale to achieve the best outcomes. This also maximises the potential to leverage major private sector investment and support from State and Territory Governments to extend the benefits of this investment across all of regional Australia. A key requirement will be for fair wholesale access arrangements to help contribute to the creation of a competitive wholesale access network in regional Australia. As a first step, the Government has conducted an Expressions of Interest process to test the feasibility of an infrastructure-based approach, and to inform the design of any subsequent program. There was a strong and enthusiastic response to the EOI – a total of 69 responses were received. It is clear that there is widespread interest in the industry to take up the challenge and the opportunity we are promoting through this approach. I am encouraged that several respondents are interested in developing proposals for major national or regional infrastructure projects that would result in well developed, end-to-end solutions of significant scale. There is strong interest in transforming the telecommunications landscape across regional, rural and remote Australia by rolling out major infrastructure projects that would offer a quantum leap forward in service quality and functionality. And these projects would utilise a range of technologies. As I have indicated there is no ‘one size fits all’ technology solution to the challenge of connecting all Australians across our vast and varied landscape. The eventual technology mix may include fixed, wireless and mobile systems. Responses to the EOI have confirmed our own assessment that these platforms all have development and upgrade paths that could make them suitable to meet both current needs and future demands. Several respondents have indicated they could form a consortium to bring together major transmission capacity projects such as inter-state links and local access solutions to be integrated into comprehensive national or regional projects. I am also confident that the proposed approach would likely leverage significant commercial investment from industry providers and other interested parties. Based on our experience with the Coordinated Communications Infrastructure Fund, the Government’s $1.1 billion Connect Australia package could well double or even triple by providing a focus for State and Territory Governments investment as well as private sector investment.

Broadband Blueprint

This summit is concerned with assessing the current state of play and preparing for future challenges, and a similar concept underlies my proposed Broadband Blueprint, which I will release later this year. In looking to the future, it is essential for all levels of government to adopt a strategic and coordinated approach to the development of next generation broadband networks. With a number of commercial infrastructure roll outs proposed, and the Australian Government poised to make its largest ever investment in communications infrastructure, it is timely that Australia adopts a clearly defined national approach to broadband development. The Blueprint will provide a national framework for the rollout of next generation infrastructure for Australia by all levels of government and the private sector. By establishing a vision for the future of broadband in Australia, and detailing key areas of strategic importance, the Blueprint will build on the National Broadband Strategy, which although only two years old, already needs updating. This is the challenge in a portfolio that has technological innovation at its heart –constantly trying to hit a moving target. The Broadband Blueprint will articulate a plan for a prosperous, knowledge-based information economy underpinned by world-class next generation broadband infrastructure. This infrastructure will facilitate industry productivity, strong economic development and the provision of key government services including health and education. The Blueprint will ensure that the roll out of next generation broadband is coordinated across jurisdictions with clearly delineated roles for State, Territory and Local Government to meet the needs of end-users. I am actively engaging my Online and Communications Council colleagues in the development of the Blueprint and it will be a focus of our next meeting in Canberra on 8 September. I have also convened an industry reference group to provide me with an additional source of advice to assist with the Broadband Blueprint. If Australia is to become a world leader in the effective use of broadband, I recognise that we need the infrastructure to connect every corner of our vast continent to faster broadband.

Conclusion

The broadband debate will continue to rage in this country – and that is a healthy thing. But I think there must be a dose of reality injected. Australia’s position in the international broadband stakes is neither leader nor laggard. We are in line with comparable countries, have a healthy and growing competitive telecommunications sector,/ we have had significant investment in equipment that has supplied our major centres with fast broadband speeds and/ we have a strategic national plan – and the investment to back it – to help propel us to the ranks of the broadband leaders. But instead of imitating countries that do not resemble Australia socially, economically or geographically, we should aspire to carve out our own broadband story. With a targeted and coordinated plan there is nothing to stand in the way of Australia being a world leader in the effective use of broadband. http://www.minister.dcita.gov.au/media/speeches/connecting_australia_fresh_opportunities http://www.minister.dcita.gov.au/media/media_releases/telecommunications_regulatory_reporting_review

Media: Unpacking the Package

4 August 2006 Sydney

Introduction

As expected, the release of the Government’s media reform package has largely been recognised for what it is – an essential transition to the new digital world of innovation and choice for consumers. So far as commentators are concerned, some want to proceed more quickly and others want to cling to the past for as long as they can. But as this week’s Pricewaterhouse Coopers media and entertainment report notes, the balance of power in the dynamic communications sector is fundamentally shifting from those who own it to those who consume it. And so, what is being proposed is an integrated and far-reaching package to transition the current industry settings to the new digital environment by encouraging new players and new services for Australian consumers. The cross media rules, for example, are almost 20 years old. While Paul Keating may be very publicly nostalgic about the old Labor days of the Princes of Print and the Queens of the Screen, he has obviously missed a few technological turns of the wheel! For instance, when Paul Keating was Prime Minister the Internet was mainly confined to academics, pay-TV was in its infancy in Australia, there was no framework for digital radio , IPTV had not been thought of, let alone 3G mobile phones, video Ipods or television over a mobile device otherwise known as DVB-H. The Government’s package of reforms will allow the Australian media sector to move from the old analogue-based regime into the dynamic new world of digital content, where traditional media co-exist and compete with new delivery platforms. The proposed reforms will enable existing players to make the most of emerging digital media technologies and give them the flexibility to structure their businesses to be globally competitive media companies. The package will also allow a better competitive environment and encourage new entrants into the media market offering consumers greater choice to tailor their own media experience. It is complemented by the Government’s $3.1 billion investment in broadband through the Connect Australia package and the Communications Fund and is reinforced by the Government’s development of a national Broadband Blueprint. This will help provide the essential infrastructure needed to connect the country to faster broadband and enable all Australians to access the full range of innovative and new multi-media services.

Putting consumers first

I have always said consumers are the end game in this process and I believe they will be the biggest winners. By next year, a range of new services may be available over the two vacant allocations of digital spectrum and these services could include free-to-air, in-home, digital only channels or even perhaps snack television delivered over a mobile device. Both national broadcasters will be able to show a range of new and exciting content on their two multi-channels as soon as legislation is passed. Commercial broadcasters will be permitted to broadcast content on a high definition digital multi-channel and by 2009 can add to that with a standard definition multi-channel. And a ‘use it or lose it’ scheme for sports rights on the anti-siphoning list will be operational ensuring both the industry and consumers can be confident the scheme is operating as intended. It would be very welcome for Australians who love their sport if these reforms result in increased sports coverage. Going digital is about more than improved picture quality. And with these new services we aim to make the digital experience in Australia more attractive for consumers so this can contribute to driving take-up of digital television in Australia.

Driving digital switchover

So how do we get to digital switchover and a superior viewing experience for Australian consumers both in terms of picture quality and content? Conversion to digital is the most fundamental change in broadcasting since the introduction of television itself 50 years ago. The current industry settings are based on regulation of analogue spectrum as a scarce resource and they will become redundant once digital conversion is complete. But until the switchover to digital broadcasting is achieved the opportunities for new digital free-to-air services on the Broadcasting Services Band are distinctly limited by available spectrum. Calls for more free-to-air commercial services now and claims that existing free-to-air proprietors are further entrenched fail to grasp this essential point. This is not a competition argument but a complex matrix of market drivers, global change, consumer choice and content but, above all, spectrum scarcity. I have already announced that the small amount of spectrum available before switchover to digital will be allocated to new and innovative digital only services rather than another look alike television service based on an old and challenged model. For not only would a fourth free-to-air television network face significant challenges as a start-up with relatively low take-up of digital television, simply replicating a service that already exists would not open up competition in any tangible sense. It is an indisputable fact that traditional broadcasting is facing many challenges. The relative regulatory freedom of digital and other platforms such as broadband, mobile phones and the Internet mean new services are outpacing broadcasting. This rapid convergence has, in my view, made redundant the Productivity Commission recommendation made back in 2000 to price and allocate the existing analogue spectrum as a scarce resource. In fairness to the Productivity Commission the landscape has changed dramatically. The main game now is how to switch off the analogue transmission to unlock the full potential of digital technology and how to do this as expeditiously as possible so that broadcasting can complement and compete with the other emerging services and platforms.

Switchover

Which brings me to why the 2008 date for switchover in metropolitan areas needs to be revisited and to the rationale for adopting 2010-2012 as a more realistic target for Australia, provided there is a Digital Action Plan to help us get there. Some commentators have been highly critical of resetting the date for switchover, arguing the premise that if digital take-up had been considerably more prolific than thus far, 2008 would have been an achievable deadline. Others have argued that if only the Government were to give all Australians a digital set-top box switchover would be just around the corner. Although a cost-benefit analysis of giving away set-top boxes to the disadvantaged and possibly beyond will no doubt be a feature of the Digital Action Plan, sadly the logistics of getting to switchover are more complicated than these two scenarios indicate. A little recognised fact is that even under the current legislation there are several switch-off dates throughout Australia.

  • 31 December 2008 for Brisbane, Sydney, Melbourne, Adelaide and Perth;
  • 31 March 2011 for Darwin, Northern NSW, regional Qld, regional Victoria, Eastern Victoria, Western Victoria, Southern NSW and Tasmania; and
  • 31 December 2011 for Mildura/Sunraysia, Riverland, Spencer Gulf, Mt Gambier, Broken Hill and Griffith/Murrumbidgee Irrigation Area.

A further challenge in meeting these dates is that arrangements for the rollout of digital transmissions to remote licence areas are yet to be finalised. Having just returned from a visit to several remote communities where even the most basic infrastructure is a challenge, the logistics of maintaining an air-conditioned digital transmitter in these communities is a complex scenario. It may well require consideration of direct to home satellite transmission as the most cost-effective and reliable solution. Broadcasters are required to provide digital services with the same level of coverage as their analogue services as soon as practicable after the start of, and certainly by the end of, the current simulcast periods. As such they are expected to be rolling out digital transmissions in accordance with the switchover dates currently provided for in the legislation. The rollout schedule is set by the Australian Communications and Media Authority (ACMA) in consultation with broadcasters. As at November last year around 1000 transmitters were still to be commissioned in the rollout for both the national and commercial broadcasters. On the current rate of about 15 a month, the remaining rollout could still take a further five to six years. However, the schedule will be impacted by the availability of digital transmitters on the open market and the capacity of broadcasters, engineering staff and other variables such as difficulty and degree of site upgrades relevant to installing them. Upgrading to digital is a global issue as the US, UK and the EU all convert to digital. Availability of transmitters, other equipment and qualified people to install them need to be serious considerations. The rate of take-up will also be influenced by such matters as public education, limited commercial multichannelling from 2007 and 2009, the removal of genre restrictions on the national broadcasters’ multichannels and the allocation of licences for new digital services over spare spectrum, making the period around 2010-2012 an ambitious but realistic switchover timetable. However, should anyone still adhere to the view that a 2008 switch-over date is realistic, I would be interested in their views and a timetable for: arrangements for conversion for remote digital television; conversion of self-help facilities; conversion of community television; channel planning for digital transmitters and signal coverage; establishment and funding of a testing and conformance centre; issues such as the need to convert reticulated systems in multi-unit dwellings and hospitals; and what subsidies or incentives should be made available and to whom and when? These issues are only part of the complex mosaic of matters that are being addressed in the Digital Action Plan. And also let me disabuse those who confidently claim that Australia lags behind other nations in switching off the analogue signal. In fact, Australia’s new target for switchover of 2010-2012 aligns with most comparable countries. Germany will be completed by 2010, France is aiming for 2011 region by region, the US is looking for a nationwide switch off in February 2009 and the UK is switching off region by region between 2008 and 2012. The EU has broadly called for member states to look to 2012 as a common switchover date. But in facing the looming and complicated task for switching over to digital, several countries have revised their original switchover dates. Even the UK, much touted for driving digital take-up – originally had a target based approach that has now been recast with firm dates for switchover between 2008-2012 by commercial broadcasting region. In the US, the original date was the end of 2006 with a target of 85 per cent take-up. Take-up targets have now been abandoned with a date of 17 February 2009 set nationwide. Italy and the Netherlands (which is currently set for the end of 2006 for national broadcasters) are also likely to revise their dates following the election of new governments. Although it needs to be recognised that there are different regulatory and commercial settings in other countries, I take the view that it is appropriate for Australia to be broadly in line with the rest of the developed world and that is what we will aim for with our Digital Action Plan which will be released by the end of the year.

Sports rights

One of the most problematic elements of broadcasting involves the regulation of sports rights – more specifically, the anti-siphoning scheme. Put simply, the anti-siphoning rules were introduced to ensure that events of national significance and cultural importance would continue to be available on free‑to‑air television, despite the introduction of subscription television. The rules operate to ensure that pay television licensees may not acquire pay-TV broadcast rights until the free-to-air broadcasters have either declined to acquire broadcast rights or the event is de-listed. Even though the list was pruned in 2004, it still contains over 1300 individual events. The Government now plans to review the scheme’s operation and continuing rationale for its existence in 2009 prior to the expiration of the current list (in operation until the end of 2010) and in connection with digital switchover and in the light of developments on convergent platforms. In practice I would acknowledge that the scheme is not without its imperfections. Whilst the Government is committed to ensuring sports events of national significance remain on free-to-air television, contrary to popular belief the anti-siphoning scheme does not guarantee that any particular event is shown on free-to-air television or that the event will be shown live or uninterrupted. It merely allows free-to-air broadcasters first right to purchase sports rights. The outcry during the last Ashes series was a case in point. Despite a public outpouring of emotion, the free-to-air broadcasters could not make a commercial case for buying the rights. SBS saw an opportunity and successfully purchased the rights and, in conjunction with pay-TV, broadcast one of the most exciting series of cricket we have seen for some time. A similar outcry over Channel 7’s plans to show Saturday night’s Bledisloe Cup match after midnight in Victoria and South Australia was another example where consumer anticipation was not matched by the reality of the coverage of a sport on the anti-siphoning list. To ensure the continuing integrity of the list, I have foreshadowed a ‘use it or lose it’ scheme. This will be a key part of reform of the regime in the lead-up to the 2009 review. The ‘use it or lose it scheme’ will ensure that the anti-siphoning rules work in the way they were intended to and do not produce the perverse effect of reducing rather than increasing the total availability of sport to consumers. There are significant issues to be worked through with stakeholders in any revamp of the scheme and the stakes are significant – for the pay-TV industry, for sports rights owners and sporting organisations, for advertisers, for free-to-air broadcasters and for consumers who expect that events of major significance will continue to be available on a free-to-air platform for the foreseeable future. In October last year I directed ACMA to monitor the use by free-to-air broadcasters of sporting events on the anti-siphoning list scheme. This was to establish an objective base upon which to design a scheme that will define ‘use’ and what will warrant an event being removed from the list if it is not so used. I have recently received the first interim report from ACMA. It is the first time information has been gathered by the regulator which comprehensively surveys the commercial free-to-air television broadcasters’ dealings with broadcast rights to events on the anti-siphoning list. Obviously there are claims for confidentiality concerning rights held to listed events and rights provided or on-sold to other broadcasters that make the report – in its current form – inappropriate for public release. However, I consider that there should now be broader industry engagement with other stakeholders in the sports broadcasting community including pay-TV, ASTRA, public broadcasters, sports rights holders and sports marketing groups about matters such as ‘use’ and what constitutes a ‘live’ broadcast for the purpose of the rules. This consultation will enable the development of a use it or lose scheme to be introduced from 1 January 2007.

Diversity of ownership

The reform proposals to relax the cross media and foreign ownership restrictions have drawn the most polarised responses with dire predictions of consolidation and reduced diversity. These views on cross media however ignore the significant safeguards that have been built into the policy. The cross-media restrictions will be relaxed to allow cross media transactions subject to there remaining at least five independent media groups in metropolitan markets and four in regional markets. Existing licence and reach limits, which provide that a person may only control one commercial television licence or two commercial radio licences in any licence area, and that a person may not control commercial television licences reaching an audience of more than 75 per cent of the Australian population, will remain. Public disclosure will be required when a media outlet reports on the activities of a cross held entity in the same group. There will be legislated local content requirements for regional radio and television. As with all other industries, the Australian Competition and Consumer Commission (ACCC) will ensure the competition laws are complied with and that any proposed mergers or acquisitions do not substantially lessen competition in a particular market. Obviously there is great interest in the approach that the ACCC will take to proposed mergers. Public statements by the Chairman Graeme Samuel indicate a disposition to consider the impacts of convergence in determining the markets affected by a merger. He has mentioned the increasing relevance of content, including news and information and the acquisition of premium content as product categories that will be material to assessing a market. The ACCC will, in the near future, release its proposed media merger assessment framework. In addition to the competition safeguards, ACMA will oversee the diversity and local content safeguards. The upshot of these safeguards is that there would be limited scope for mergers in regional markets and they would need to be assessed on a case by case basis. For instance, a 4/5 test would mean that in around 63 per cent of markets there could be no mergers unless a new player entered the market. In around 18 per cent of markets there are five voices so only one merger could potentially take place. So, in around 81 per cent of markets there could be little or no merger activity unless new players first enter the market. In metropolitan areas a 4/5 test would mean that there would be little scope for mergers in smaller capital cities such as Adelaide. The limitation on owning no more than two radio licences in a market would mean that Sydney and Melbourne could not drop below six voices. And in addition to the traditional commercial media, consumers would continue to have access to ABC and SBS television, radio and online services; subscription television; community television and radio broadcasters, out-of-area and national newspapers, and a myriad of online services available over the Internet. And in reasonably short order, they will also have access to the new digital services that these reforms will facilitate. In regional areas it is prudent to note that not all newspapers in a licence area are ‘associated newspapers’, which means they are excluded from the cross media calculations. This eliminates from the calculation many community and local newspapers and national daily newspapers such as The Australian and the Australian Financial Review, as they are not associated with a particular licence area. I have heard the calls for more stringent rules to apply to mergers in rural and regional Australia and I will continue to consult with my colleagues – both Liberal and National – closely during the drafting of legislation. But I do believe it is important to note that there are substantial risks in over-regulating regional markets that could have long term disadvantages for delivery of new media services, particularly to underserved licence areas. It is not possible – nor is it desirable – to legislate for every potential outcome. It is preferable to have a clear regulatory framework backed up by appropriate safeguards such as those relating to local content. Over-regulation in this instance could shut out regional media companies from the benefits of reform, which will damage their businesses and ultimately, the services they deliver to their audiences. The benefits of reform will enable regional media companies to invest in new technologies, as their metropolitan counterparts do, to deliver improved services to audiences. We do not want to end up with a two-tier system for broadcasting in Australia that disadvantages rural and regional areas. And new technology is leading to the emergence of influential platforms such as broadband and the Internet. These services do not respect ‘borders’ like traditional media. The concept of quarantining some forms of media within a licence area while other forms of media are ubiquitous will become increasingly difficult to justify.

Diversity of news and information

Quite apart from the high probability that it will be old media buying into new media rather than wholesale mergers or acquisitions of mature businesses, it is reasonable to ask what these changes might do to diversity of news and opinion? The fundamental issue with diversity is the availability of diverse sources of information and opinion, not whether the Government should somehow seek to measure and equalise the popularity of different outlets. With the proliferation of media platforms there is a wealth of news and information available to every Australian. Some of these sources are of course far more influential than others – that is simply the market in operation – but this can change over time. But anyone who thinks one or two big media players can keep information out of the public eye is living in the last century. In a digital world, the market place of ideas and information is more transparent than ever before. It is not within any individual’s power to direct or control public debate. Just look at the kind of stories which have been broken and propagated by online media here and around the world. Matt Drudge and the Lewinsky story spring to mind, or the exposure of fake documents about President Bush in the 2004 election, or the now infamous Llewellyn affidavit here in Australia. In the latter case, by the time a Supreme Court suppression order was sought by the relevant media organisation, the affidavit had been published online – it was already too late. And when it comes to a variety of sources of opinion – the lifeblood of healthy democratic debate – there can be no question that the Internet has revolutionised the distribution of opinion. The Internet is bristling with blogs, websites, podcasts and chatrooms where thousands upon thousands of views and opinions are expounded and spread. I have been accused of claiming that the Internet is a ‘replacement’ for diversity of ownership and content. I have never made that claim – but I have always recognised that the Internet is a powerful source of news and opinion at an international, national and regional level – and its impact is growing exponentially.

Conclusion

Embarking on media reform in Australia is not for the faint hearted. As the saying goes – you would not start from here. However, I am confident that the reform package gets the balance right between transitioning old media and embracing the new and ensuring that Australians have access to the best the world can offer. As a nation we cannot ignore these changes and we cannot avoid reform. This time we must do it. ://www.minister.dcita.gov.au/media/speeches/media_unpacking_the_package

PRESS CONFERENCE

July 13, 2006 Senator Helen Coonan Minister for Communications, Information Technology and the Arts HELEN COONAN: Thank you very much for coming. Today I’m announcing details of the government’s framework for media reform. The objectives of media reform are to progressively deregulate the sector to take advantage of new digital technology and new services and to provide, of course, more choice for consumers. What I have to announce is, I think, a comprehensive package designed with the interest of consumers in mind. There are nine key elements to this package and a number of subsets which I will go through briefly. And in the material that’s being handed out, there’s obviously a lot more detail and I’m sure that some are more interested in certain bits than others. As part of the framework announced today, the government will, first of all, develop a digital action plan to drive the take up of digital television services and to help consumers make the transition from analogue services to the new digital environment. That is absolutely necessary because the current switch off date at the end of next year, sorry, at the end of ’08 won’t see enough take up of digital and we need to reset the date for a target of 210 to 212 (sic). The second thing we’ll do is to open up two reserve digital channels for new digital services such as mobile television or new in-home services. That will mean that up to 30 new channels could be available on some users, under some users, and that spectrum will use up the other, the only spectrum that’s reserved until we can get to switch off and have available more digital spectrum. So that means that the government has made a decision to go with two new digital licences and to use that spectrum instead of allocating just a look-alike for commercial free to air station. The next set of reforms relates to multichannelling. The government will permit commercial free to air channels to broadcast one standard definition multichannel from 2009 and to allow full multichannelling no later than the time of digital switchover. In addition, we will permit a high definition multichannel by removing the simulcast requirement on high definition television programming. Thirdly, we’ll remove the genre restrictions on the types of programming which can be shown on ABC and SPS multichannels subject to not showing sport on the anti-siphoning channel unless it’s first been shown on a free to air channel. This means that potentially consumers are looking at up to eight multichannels, free to air.  The anti-siphoning regime will be substantially reformed to commence on 1 January next year. It will comprise or it will introduce a use-it-or-lose-it system for sporting events on the list. There’ll be further consultation on what will constitute ‘using and losing’ and ACMA, the regulator is currently monitoring the anti-siphoning list for the introduction of these reforms. And subsequently the anti-siphoning list will be reviewed when it comes up for review in 2010 which is likely to coincide with the commencement of switchover in any event. But obviously there will always be a core anti-siphoning regime at least for the foreseeable future because we understand that Australians very much enjoy watching events of national significance on free to air television. There will be a relaxation – and I stress relaxation, not removal – of the current restrictions on cross-media ownership subject to safeguards that will ensure no fewer than five independent voices remain in metropolitan markets and four in regional markets. And that will commence upon proclamation on a date to be determined in 2007. And the relaxation of Cross Media will be subject to a number of protections. Firstly, there will be legislation to retain license conditions ensuring local content on regional television in Queensland, New South Wales and Victoria and will be extended to Tasmania. Next year, there will be a review of the arrangements in South Australia and Western Australia. There will be specific protections for local radio content in regional markets by requiring commercial radio licensees seeking mergers in regional markets to meet minimum standards for local content including news, community service, announcements and emergency warnings. The protections and safeguards will also include the ACCC who is currently specifically empowered to take into account regional areas, regional markets. The ACCC will ensure that competition laws are fully complied with under the general mergers provision in the Trade Practices Act. That will mean that any merger will be subject to not substantially lessening competition in the market according to the tests that are currently applied and that may be developed by ACMA and by the ACCC.  ACMA will oversee the safeguards to ensure diversity in local content including ensuring that transactions comply with the minimum number of media groups. So they will administer the five/four numbers. The foreign ownership restrictions will also be removed but we will retain the media industry as a sensitive sector under the rules, under the Foreign Investment Policy. That will happen upon proclamation on a date to be determined in 2007 at the same time as the Cross Media rules are relaxed. That means, when something is a sensitive sector that all media transactions, all direct media transactions are subject to scrutiny and indirect investments over 5% are subject to scrutiny. We’ve found that that is effective and appropriate to ensure that the national interest is maintained.  The regulator will be given a significant suite of additional powers to regulate broadcasting including the power to seek civil penalties and injunctions and to accept enforceable undertakings from broadcasters. These complement the review that I announced last week on Television Codes of Practice that relate to reality television programming and also complement new legislation that I announced in June extending to converge devices, mobile phones and premium internet services, some content regulation. We think that taken as a whole, the set of arrangements provide a degree of flexibility to enable not only media players but consumers to have all the advantages of new technology and new investment in these services. I firmly believe that it’s consumers who will be the most significant winners out of this package with access to a range of new services, particularly several new digital channels and, of course, even more to come in the transition to digital television. Finally, I just want to say something about timing. It is very interesting the speculation about timing, but nothing has slipped. Everything is still on time. Nothing has been put back. There has now been a government decision to adopt the package and the core decisions have now been made. There is, however, a degree of implementation to be worked out in relation to the design of spectrum and the issue of new digital licenses and, of course, in relation to development of the Digital Action Plan. However, in both of those areas, we expect to be able to announce the outcome of how they will be implemented, not whether they will be implemented, but how they will be implemented later this year. It’s a timeframe that should see all of the necessary legislation developed this year and the package implemented in 2007. Thank you. QUESTION: Won’t this simply concentrate media ownership from now on? HELEN COONAN: I don’t think so because of the safeguards. In fact, I really find it very difficult to see how anyone could think that it will simply concentrate the media from now on. What it will do is enable some new investment. It will enable some scale and scope. But, for instance, the regional protections which is an interesting example mean that for 63% of regional markets, no mergers would be possible at all under this floor of four. One merger would be possible in 18% of regional markets. So that means that in 81% of regional markets, you have none or one unless there is a new entrant and I do think that there is some possibility of new entrants. Nineteen regional markets have six or seven players, but only 20% of regional markets can potentially have more than one merger.  So, before everybody gets too exercised about any potential concentration, I think we need to realise that these safeguards have been designed very carefully to ensure that there are possibilities in larger markets but a number of safeguards and certainly a number of hoops that potential investors would need to jump through before they could or would undertake a merger. And I think it is also relevant to say that when this was previously looked at and there was a discussion about whether there would be two out of three, that actually only dealt with the types of mergers not the number. The floor of four and the floor of five is actually a more stringent test. QUESTION: What about 20% in cities like, say, Newcastle and Wollongong, which are the bigger regional markets but may not necessarily be big enough to attract new investors into those markets. Are those major regional centres, the ones that could potentially suffer the most out of these? HELEN COONAN: Well, why would they suffer if it means that consumers are actually able to get new services because unless … QUESTION: [Inaudible] HELEN COONAN: Just let me finish my answer please. The markets that have the requisite number are certainly the ones that could be potentially subject to some of the movement under this floor test. However, whether that happens will depend whether or not there’s a substantial diminution of competition in that market. It’s important to understand that the ACCC applies the rules not relating to companies but relating to the market, and the operation of that particular market. So the fact that that might occur in those kind of very large regional markets I think is more likely to attract investment rather than discourage it. QUESTION: Do you have a view on what using a program means as far as the anti-siphoning law, will you leave that purely to ACMA– HELEN COONAN: No. QUESTION: — to develop the definition. HELEN COONAN: No, they’ll be consultation in the last quarter of this year based on ACMA’s monitoring of the operation at the anti-siphoning list. And there will be consultation between government, ACMA and the relevant industry players as to what would constitute use or sufficient use and what would be the conditions under which it could be lost. QUESTION: But there’s actually, there’s black and white views on the Pay TV and the free-to-air, how are you going to resolve this? HELEN COONAN: Well that’s what government’s job is, on advice from the monitoring that’s currently underway. But there’s over a thousand events on the anti-siphoning list. Quite clearly some of them are not used. And I think it’s appropriate that we have objective monitoring and that it’s transparent so that all of those with an interest in the operation of the anti-siphoning scheme get an opportunity to have a say about how the monitoring goes. QUESTION: Minister, you’ve achieved something your predecessor couldn’t achieve. You’ve actually got cabinet blessing on cross and foreign. You still have to get the support of the Senate and particularly the Nationals. Notwithstanding the regional framework that you’ve announced, that you’ve unveiled, are you confident that you could win the support of the Nationals, particularly in the Senate. And Barnaby Joyce last night was questioning some of the reforms as he understood it. HELEN COONAN: Well, I’ve had a very long conversation today with both Senators Joyce and Mr Neville who called me from overseas and we’ve walked through the package. I think they’re broadly supportive of the package, but it’s a very complex package and it’s important that for the purposes of people voting, they understand what they’re voting for. QUESTION: So you’re confident the Senate will back this? HELEN COONAN: Well, what I think is that Cabinet’s backed it. There were three National party ministers in the Cabinet who supported it. And certainly from the way in which the package has been designed and they’ve been extensive and exhaustive consultations with most of my colleagues, that we’ve dealt with most of their concerns. QUESTION: Usually we would say by not opening up a fourth commercial television channel that it is anti-competitive, advantaging the free-to-air channels against a television. What do say to that? HELEN COONAN: Well, it’s a very puzzling argument when you think about, isn’t it, because we’re going to provide that space for directly competitive services. Under the current arrangements, free-to-airs cannot bid for additional licenses whereas News could. So I don’t really quite follow the concern about no fourth channel. QUESTION: So News or Fairfax could bid for one of those two new channels. HELEN COONAN: Well, potentially yes. QUESTION: They will be restricted to — I thought you said that they’d be restricted to mobile telephony … HELEN COONAN: Well, they have restrictions. QUESTION: We’re not talking about other free-to-air. HELEN COONAN: No, they’re not a look a like fourth free-to-air channel as what you get sitting in your lounge room. But with the advantage of technology of course, there are many opportunities now to redesign what was the old datacasting and was not something that was very attractive into some very attractive ways to deliver new services and information and entertainment to consumers. QUESTION: Are those restrictions on the datacasting defined here and is the difficulty of defining restrictions one of the reasons why that needs further consideration this year? HELEN COONAN: No. What was required, David, was a decision in principle to allocate them. Then of course you can go to the substance of the design of the spectrum, the conditions that you attach to the issue of the licences, how they will be allocated, whether they’ll be auctioned, whether there’d be a beauty parade. Precisely the best way to deliver these services. What is a business case? There’s lots of issues that we can now look at confident that there’s a decision in principle to allocate. QUESTION: But if you open the definition too widely and make it too broad, you could have a fight on your hands with some of the free-to-air networks. HELEN COONAN: Look, I’m quite used to having fights on my hands I must say. But I’ll be having a look at all of the context as to how these additional digital licenses will be designed and I make no apologies about this. I’m in it for the consumers, and I want to get new services for consumers and I think that that is entirely what a package of this magnitude should be delivering. QUESTION: So that could include subscription services? HELEN COONAN: Sorry. QUESTION: They could still include subscription type services, those two… HELEN COONAN: Well, they’re not excluded but I think more free-to-air services in that space is something that could be desirable. But what we need to do is to have a look at the conditions on which these licenses would be allocated. QUESTION: How did the action plan work, how do you make sure that Mary Bloggs who is 73 and doesn’t even have a mobile phone can watch television …? HELEN COONAN: Well, I mean the first answer to that is, you’ve got to get a time frame in place. You’ve got to look at the logistics of what needs to be done. What are the tasks that we need to identify that have to be done to get to switch off. They’re complex and difficult and what I think we do need is to get a road map to get there. For instance, what you need to do with manufacturers, with retailers, with consumers, with people who ultimately are frightened of technology and don’t really know how they’ll do it. We have to look at what we give consumers by retailers. We have to get the cooperation of industry and I think we then have to look at some milestones along the track to 2010, and we’ll have a look at where take up has got to. I’m very confident that with new and innovative services and proper consumer information plus the fact that the price of set top boxes is coming down significantly and dual tuners in televisions is now becoming more available. It’s all moving on and I think as we stand here in 2006, we’ve got to escalate the attention to getting people to understand what they’re going to be asked to do in 2010. And ultimately one might have to look at people who are disadvantaged, that’s happened in the UK, that’s happened in Germany, to make sure that no one’s left out of here. It’s a very long and difficult task. So what we’ll do is come back with the design of the plan this year and that will have the time frame and how these sorts of logistics are going to be identified. QUESTION: So 2010 is not set in stone as far as you’re concerned, there’ll be no slippage. HELEN COONAN: Well, it’s a target, Steve. It’s a target. I mean what you’ve got to do is to have some way to get there when you’ve got something this far out. The difficulty has been that a date was set and none of these kind of issues appeared to have been addressed adequately to my way of thinking. And I think it’s not just for government. This is something that really needs the community being on board. You need all of the stakeholders to participate in getting to something like the change over of a major technology. QUESTION: But it’s not an undertaking. HELEN COONAN: What it is, it’s a target. QUESTION: Are you saying…? QUESTION: You’ve indicated that you’ve had a discussion with Mr Neville and Senator Joyce and three of your National party cabinet colleagues signed off on this package. Does that mean in your mind, this is it, this is the bottom line that when the legislation is presented to parliament, there’ll be no more horse trading. This is it, this is the final package or is there room to move to address concerns they may have over the coming weeks. HELEN COONAN: It would depend on what the concerns were, I would think. But this package has been very comprehensively workshopped and discussed with colleagues over some considerable period of time. So I would think that apart from minor matters, it’s the decision that will guide the framework now for the implementation of these quite complex matters. QUESTION: Doesn’t the slippage on digital television mean that digital radio will be compromised because the analogue TV spectrum won’t be freed up for more services on digital radio and so therefore it won’t be attractive to an audience? HELEN COONAN: Well the radio package is on a slightly different track partly due to industry and partly because the framework has just been announced. It has its own set of conditions and it’s operating under the current technology with the development of a multiplex. Under the current multiplex and with the current standards, there is enough spectrum for radio to be competitive and they’d want to get on to digital and that’s what we are doing. QUESTION: The consumer interests would be enhanced by PBL taking over John Fairfax and/or News Limited taking control of one of the free-to-air networks. HELEN COONAN: Look, I think, I’m not going to really be drawn on specific possibilities and probabilities here. I mean, I really do think rather than us speculating about that what we have to do is to say that there’s a framework that will give options. There are some very stringent safeguards and conditions attached to it, and then it’s going to be a matter of what parties see as something they wish to do and whether they pass all the tests. QUESTION: Do you think the package is balanced enough? It’s got all these balancing factors in it. Is it sufficiently balanced to offset or to minimise some of those concerns aired by the media moguls like Murdoch and Stokes. Do you think you can settle their concerns with this package? HELEN COONAN: Well, look this is not designed for any particular media mogul, let me make that perfectly clear and I think you can see from the detail that it is not. It does not address the kind of issues that might have entirely suited the agenda of certain media proprietors. It’s a balance and I must say that I think it’s very important that we understand that if they are actually going to deliver these services, you try and understand what they need to do and where they want to take their business. That makes a lot of sense because they deliver things that consumers actually like. That’s why it’s important that rather than pull the rug out and cancel all televisions licences and try and do impossible things, now what we need to do is to ensure that you’ve got a transition to a deregulated environment that doesn’t take away from consumers what they expect and enjoy now. QUESTION: Minister, just back on the anti-siphoning list. Do you believe consumers would like to see more live sport on TV and can that be achieved? HELEN COONAN: Well, look, I think that the way in which this list is paired, if you like, is something that we’ve got to have a look at in terms of the monitoring. I think a lot of consumers get very frustrated when free-to-airs don’t show certain things that they’re expecting. Somebody complained to me the other day that somebody cancels, one of the television stations, I don’t know which, had cancelled the golf two days running because they said there wasn’t interest or whatever it was. Now, I don’t know whether or not that’s correct and that’s why we’ve got some rigorous monitoring into it so that what is reasonable in terms of commercial programming can be shown and what’s not should be able to available to be shown elsewhere. QUESTION: So there is an argument to cut the anti-siphoning list depending on the ACMA findings later this year? HELEN COONAN: Well, I’d have to see what it is. But what I’ve said is that we will introduce a use-it-or-lose-it scheme that will build on what the monitoring tells us following consultation, of course. QUESTION: With regard to the numbers you gave us on the limited potential for mergers in regional Australia, what do the same figures show us, what do your figures show us for the potential for mergers under the new regulations in urban Australia and why you clearly don’t agree with the criticism that we’re in for a flood of mergers and takeovers? What increased level of activity in that sense do you expect? You expect some, I presume. HELEN COONAN: Well, I don’t know. I mean, it’s a matter for proprietors and people who are running media businesses as to what they see is a business case. What these rules are designed to do is to provide a bit of flexibility to enable media companies where they are sufficiently large to be able to make some investment with some confidence that they can build on what the rules allow. So it’s really to try to put a framework around it, not to speculate about who might do what. QUESTION: But you speculated with those numbers in regional Australia on pretty tight possibilities on potential mergers. What are they like in urban Australia? What do you see? HELEN COONAN: Well, they’re a different range of percentages which I can give you later if you like. I’m not going to read them all out because there’s a lot of markets all around Australia. But the point I was making in regional Australia is that because there’s been a great deal of comment about regional Australia, that it’s not, to my way of thinking, an issue where there could be many because we know that 63% of them just fall under the floor. Now, you know, if you like I can give you charts of what numbers there are in every market but I’m certainly not going to speculate on what might happen. QUESTION: Will the digital action plan include subsidies for the disadvantaged people you were talking about earlier? HELEN COONAN: It may do but we have to wait and see what the digital action plan looks like when it’s developed and the issue really is probably not so much as whether but when. I mean, I don’t think it’s appropriate to be looking at subsidies before some of these reforms work and you see what people will do in any event. You have to always have regard to the fact that it’s taxpayers’ money you’re looking at here. But there is a case, no doubt, at some point of penetration of digital where you would look at people who need help. QUESTION: Would it also encumber something like some sort of standard on the set top box so that people couldn’t exclude other players when they provide a set top box under various arrangements? HELEN COONAN: Well, it may do. I mean, these are, I think, legitimate issues that need to be tackled in the digital action plan but the clear objective will be to get everybody to be able to receive a digital signal by 2010. And part of having a digital action plan and possibly even a purpose built industry group to look at how you get there, such as the SwitchCo in the United Kingdom, is to identify where the barriers really are. QUESTION: So what do you think is the most likely date to switch off today’s analogue signals? HELEN COONAN: Well, I think it’ll be a staged process but once again that’s something that needs to be worked out as part of the digital action plan. And it has been proven to work reasonably well if you do it region by region in other jurisdictions. So we’ll be having, in fact have had a good look at that. So I would expect without wanting to be regarded as having made some definitive statement about it, I would expect that it would happen region by region commencing in 2010. QUESTION: Minister, just on the leadership issue, would you endorse Mr Howard taking the Liberal Party to the next election as leader and do you think it’s in the interest of the Liberal Party government that he declare his position sooner rather than later? HELEN COONAN; Well, look, what I want to say about this is that I think the Prime Minister has very clearly demonstrated his ability to make decisions in the interests of the Australian people and in the interests of the Liberal Party time and time again and I think we can continue to rely on his judgement. QUESTION: Minister, with these changes today, through your eyes, do you see the media landscape expanding or with the passage of time, fewer media players? HELEN COONAN: Well, I certainly think that with new digital services it will expand because there are new players and I expect as a result of this package that there is likely to be some new players. I don’t know, I might not be correct about that but from the interest that has been expressed, I would expect that there will be some new players and I think that’s a very thing for diversity. If, say, a new third grouping, major media grouping emerges out of these reforms.  But let me say this, that the way in which technology is moving, I don’t think it will be very long before we will be able to get, for instance, the same content over a mobile phone, over broadband and over television in broadcast. So, some of the kind of rules around allocating licenses in areas becomes quite problematic and I think this is an area that is very fluid and it changes very quickly. It’s one of the reasons why we can’t just stand with our feet planted in concrete here and do nothing. We do need to move on in all of these areas and recognise that if we don’t do it, technology will simply overtake us. QUESTION: Do you think channels should be national network? HELEN COONAN: Yes. QUESTION: There are reports that some of the mobile phone companies might try and wrap up exclusive deals on content using the [DVDH] standard. Do you think that that mobile phone datacasting should be open to all phones or is it free to companies to carve it up and say, only show TV channels to their own mobile phone subscribers? HELEN COONAN: Well, look, I think that’s what we need to have a look at as to how we’ll design it and what kind of conditions are attached to it. I think that you’ve raised a legitimate point. I think on content, more broadly, the regulator, at least Mr Samuel has said, I think in a number of speeches that he is particularly interested in the tying up of content as part of what ought to be considered when you look at markets and when you look at some of these mergers. So, I do think that it’s important that we have regard to these kinds of new ways of getting access to these kind of platforms in how you design it. QUESTION: What do you see as the role of the ABC? I mean, I gather in what you’re saying is they will supply some of this digital TV technology, new content and so on. Is that how you see it? HELEN COONAN: I think that the ABC, just as the BBC, has a potential role to do some very new and innovative things and, in fact, I think they’ve done a very good job so far with ABC2 and certainly with their online service. I think that the ABC is to be commended for that and I think SBS has also done some very good things. They’ve been hamstrung to a large extent by the genre restrictions. I think that that’s important, that those restrictions get removed. QUESTION: The ABC will now be able to broadcast after the genre restrictions being removed a new 24 hour news and current affairs channel? Or SBS a 24 hour sport channel? HELEN COONAN: As long as they are not infringing the anti-siphoning scheme, they will have a lot of programming flexibility as to how they might want to use their second channel. QUESTION: Have you had any discussions, Minister, with any of the international media groups who are showing any interest in, perhaps coming to Australia? HELEN COONAN: Not for some time, although I certainly have had contact from what you would call as international stakeholders. QUESTION: Recently? HELEN COONAN: Not recently, but I’ve certainly had in earlier months some contact. QUESTION: Try to attract a number of these to Australia…? HELEN COONAN: I mean, Australia is an investment opportunity for a lot of industries. My role and the Treasurer’s role in this is to ensure that we look after the national interest and that foreign investment accords with the investment in any other sector. That means that it remains subject to scrutiny by the Treasurer because it’s regarded as a sensitive sector, but the commercial opportunities are not something I want to speculate about. Thank you very much. Thank you. http://www.minister.dcita.gov.au/media/transcripts/press_conference__media_reforms

INTERVIEW WITH COMMUNICATIONS MINISTER HELEN COONAN ABOUT: THE SALE OF TELSTRA, FEDERAL LIBERAL PARTY LEADERSHIP BATTLE, NSW LIBERAL PARTY LEADERSHIP,

PAUL BONGIORNO, PRESENTER: Hello and welcome to Meet the Press. The Communications Minister outlines her vision for the future of Australia’s media as Labor ramps up its campaign to shame the Nationals into voting down the Telstra sale legislation this week. And concern for lone mothers and disability pensioners as Cabinet meets to finalise its welfare-to-work reforms. But first, what the nation’s press is reporting this Sunday, September 4. All the papers have extended coverage of the Katrina hurricane catastrophe in the US. President George W Bush has ordered more troops to help evacuate and secure New Orleans. The reinforcements will bring to 40,000 the number of military involved. Thousands of survivors have been ordered out of the two major shelters, the Superdome and Convention Centre where they’ve endured brutal conditions. Nine Australians are among those bussed out of the city, another 40 are believed stranded. In Sydney, the ‘Sunday Telegraph’ has: “$50 million Labor plan to shield children.” Kim Beazley is proposing a $30 rebate for parents to buy software filters to prevent children accessing pornographic and violent websites. The ‘Sunday Mail’ in Adelaide has PM to Costello: “Sorry I spoke.” John Howard attempted to patch up a new row with the Treasurer over tax policy in a late-night phone call. In a TV interview, Mr Howard appeared to contradict Mr Costello on cutting the top rate. The ‘Sun Herald’ in Sydney has: “Brogden considers future at secret country refuge.” Former State opposition leader John Brogden has moved from a psychiatric clinic to a secret rural retreat. The paper also reports the Greens saying, “The State Liberal’s shift to the right on gays and abortion is deeply troubling.” Besides guiding the Telstra sale legislation through the Senate today’s guest is working on new laws for Australia’s media which inevitably will lead to changes in the way moguls like Kerry Packer and Rupert Murdoch can play in the market. And, indeed, how major overseas investors can enter it. Welcome back to the program, Minister. HELEN COONAN, FEDERAL COMMUNICATIONS MINISTER: Thank you, Paul. PAUL BONGIORNO: If I can just go to Telstra. You’re bringing five pieces of legislation into the parliament this week. Will you allow the Senate to scrutinise those bills by way of an inquiry or a committee? HELEN COONAN: Well, obviously a decision will be taken as to how the bills proceed. They’ll be introduced this week and I would think they will be debated for some considerable time. That’s what the Government expects. But I’d certainly like to get a vote on the sale legislation and, indeed, all the other legislation, particularly the big spending packages that are attached to it that are going to look after consumers, by the end of the second week. PAUL BONGIORNO: Labor makes the point that the details of these bills haven’t yet been seen and often scrutiny by Senate committees picks up unintended consequences. HELEN COONAN: Well that, of course, has been the traditional role of the Senate. I imagine it’s traditional role will be discharged in relation also to looking at the Telstra bills, but whilst, of course, there is a potential for great complexity, it is really a very straightforward process of securing the authority to proceed with the sale of Telstra, which is really what it does. And then, of course, there are a lot of other parts of the legislation that support it, including, of course, the very significant package – $3 billion package – to ensure that services will be secured into the future. PAUL BONGIORNO: You don’t think the Nationals might want to have a very close look at that package to make sure that you are delivering what you say you are? HELEN COONAN: Well, I propose also to have a ministerial statement, Paul, which will pull together all of the parts of the package and all of the things that we have agreed to do in connection with seeking the authority to sell. Obviously some of the things are contained in licence conditions, for instance, that don’t require legislation, but clearly those who are interested and indeed vitally concerned about this will be able to see the whole package. And where the Government is actually implementing the package in the ministerial statement. PAUL BONGIORNO: Minister, Kim Beazley’s idea – a $50 million package to give parents a rebate to install software filters – do you have any sympathy for that? Do you think it’s a good idea? HELEN COONAN: Well, the Government’s already mandating the fact that ISP providers have to offer filters to parents so that, in fact, it’s a chosen experience, it’s something that parents can do in their own homes to keep their children safe. Together with that, we’ve got a $30 million cyber safe program that we announced in the last election. That is a very targeted amount of money that also helps the federal police actually weed out this nasty stuff on the ‘Net. And we’ve also got a very effective organisation called NetAlert which is actually currently conducting a roadshow all around Australia to actually help parents and teachers teach children how to use the Internet. I think that these combination of measures, which also understands the enormous cost to ISPs and small business, that this kind of proposal would entail, will, I think, be a better overall outcome for the safety of children on the Internet which the Government takes very seriously. PAUL BONGIORNO: Much of last week was dominated by the Treasurer pirouetting around his leadership ambitions and tomorrow his image broadening sees him flying out to Indonesia and Aceh with a planeload of journalists. Here’s what Wayne Swan thought of that. WAYNE SWAN (EARLIER MEDIA APPEARANCE): He has turned this trip into a taxpayer-funded leadership campaign for photo opportunities. It’s that simple. The Treasurer’s turning his back on the parliament, showing his contempt for the Prime Minister and leaving the country at a time when the parliament is sitting. PAUL BONGIORNO: Minister, haven’t we reached the point where everything Peter Costello does is seen through the prism of his leadership ambitions? Don’t you think, perhaps, the time has come to bring it to a head, to sort it out? HELEN COONAN: Well, I think Wayne Swan’s comment, quite frankly, was particularly puerile. I mean, why would you criticise a Treasurer going as part of a finance meeting, going and having a look at what’s happening in Aceh, that is actually using Australian aid money? I mean, I think that was a very silly statement by Wayne Swan. PAUL BONGIORNO: On leadership, you see in Britain Tony Blair has nominated that he won’t contest the next election. Our Prime Minister himself in London agreed that he’s no lame duck, Tony Blair. I mean, John Howard could do something the same without damaging himself, couldn’t he? HELEN COONAN: Well, I think the point about the leadership, if I may say so, is we do have an outstanding team. I have, in fact, been on the record saying that I think the Prime Minister has earned the right to say when he will go and how he will go. But – and that obviously we have a leader in waiting and an obvious successor, a very talented person who will be able to step into those shoes. The other point I’ve made about the Prime Minister is that he has very good judgment and with the commitment that he’s made to the Liberal Party over the years I am absolutely certain that he will make a decision not only in his own interests but also in the interests of the party when he makes it. PAUL BONGIORNO: Well, as a senator for NSW and as a Liberal, obviously you’re a member of the State division. Patricia Forsythe, a frontbench Liberal in the State House says that the division has been taken over by right-wing extremists. And I know Dr John Hewson, former federal Liberal leader, has the same fears. Are they overstating it? HELEN COONAN: Well, I think that obviously with the tragic events of last week – and I do hope that John Brogden and Lucy are able to get their life back together and I’m sure we all send our best wishes to them – I think the really important thing is that once you’ve had that kind of cataclysm in a leadership it’s important that whoever is now the leader – and that’s Peter Debnam, he’s very able – that they settle down and they focus on winning the next election. That’s their job, and it’s not to rake over the coals and to try and attribute blame. I think it’s very important that they get on with the job of trying to win government in NSW. PAUL BONGIORNO: There’s no right-wing takeover? HELEN COONAN: Well, I certainly wouldn’t have thought so. PAUL BONGIORNO: Coming up – Telstra warns the Government its new regulations will lead to less investment and poorer services. PAUL BONGIORNO: You’re on Meet the Press with the Communications Minister Helen Coonan. And – welcome to the panel, Jennifer Hewett, the ‘Australian Financial Review’ and Louise Dodson the ‘Sydney Morning Herald’. The Labor Party has launched a last-ditch campaign in Queensland to pressure the Nationals not to hang up on Telstra when the legislation comes into the parliament this week. Kim Beazley found a phone box without a phone in it and he seized on remarks from Telstra’s American 2IC, warning service regulations would turn Telstra into a loser. Kim Beazley (earlier media appearance): When we look at the news as today, what we see abundantly clearly is this – once privatised, as far as the senior leadership of Telstra will be concerned, it’s off the map. JENNIFER HEWETT, THE ‘AUSTRALIAN FINANCIAL REVIEW’: Minister, the Telstra organisation seems to be in war with the Government when you’re the majority shareholder. Really what chance do you have of controlling it once it’s privatised? HELEN COONAN: Well, of course, you’ve got the same controls that you have now. We, in fact, control the way in which Telstra operates by way of licence conditions, not because we have a government ownership in Telstra and, in fact, that remains, that legislative framework remains. The ability to look after consumers, the ability to control the competition environment, that all remains quite irrespective of whether or not we have an ownership in Telstra. JENNIFER HEWETT: But there’s plenty of ways to skin a cat, Minister. They could do a go-slow on investment, they can continue to fight the ACCC even harder. I think they can make life difficult for people, particularly in rural Australia, can’t they? HELEN COONAN: Well, Telstra can do what Telstra can do now and it can do what it can do after it’s sold, if, in fact, the Government proceeds to sell it. And the regulatory regime will remain the Government’s responsibility and the Government’s decision. That will be the case whether or not we’ve got an ownership overhang in it or whether we don’t. But what I can say is that Telstra is running a business. It’s the largest telecommunication company in this country. And I would be astounded if they don’t want to make investment, grow the business. The new management team were, in fact, brought in to do just that. They weren’t brought in to roll back the regulatory regime. They were employed on the basis that they had a job to do within the existing environment. And dismantling the regulatory environment is certainly not their core business. JENNIFER HEWETT: Phil Burgess says he wouldn’t put his mother in the stock. Would you put yours in? HELEN COONAN: Well, I think what’s important is that I don’t give advice about shares or the value of the shares. What I can say is that no-one has yet made a case that the current status of the shares has anything to do with regulation. In fact, the current regulatory regime has enabled Telstra to deliver the largest ever profit it’s ever made. I mean, $4.4 billion in the existing regulatory environment. People who have advised Telstra and people who are independent experts have, in fact, referred to the fact that Australia has a light regulatory touch and have actually gone and argued for the Australian regime in other jurisdictions, such as Canada. It just doesn’t wash. We don’t have over-regulation. We want to make sure that there is a level competitive environment so that Telstra, as the largest provider, doesn’t swamp the competitors. And we know that competition works in this country because we’ve now got over 100 telecommunication providers, an economy that’s $10 billion bigger. It employs over 30,000 people and it’s very good for small business and consumers. I think that the longer that this kind of public comment – unhelpful public comment – goes on, the more it fortifies the Government in its view that the regulatory regime is necessary to protect consumers and we won’t back away from that regulation. LOUISE DODSON ‘SYDNEY MORNING HERALD’: Minister, the day Telstra posted its $4 billion profit CEO Sol Trujillo flew to Canberra with a submission which warned, “The old way is bad for Telstra and even worse for consumers because it leads to even less investment in new networks and technologies to provide advanced services to consumers and especially consumers in rural and regional Australia.” That’s quite a threat from Mr Trujillo. Should he go back to his box and make the system work rather than threatening the Government with poor services? HELEN COONAN: Well, what I think needs to be explained is why the share price is the way it is by the management. I mean, there’s been $2.2 billion written off because of bad previous management decisions. That’s got nothing to do with the regulatory environment. That’s poor management of Telstra. There has been under-investment in the network and it is important that Telstra starts to tell its story to the market, to the mums and dads that have got a real stake in Telstra, about what it’s going to do to upgrade its network and to roll out some response to the fact that there’s pressure on its fixed line network. This is happening all round the world with every dominant telecommunication company and the response has been to look at new networks such as, for instance, BT’s recent announcement as to how they’re replacing their fixed network. It’s not to go after the regulatory regime which, after all, delivers a competitive environment for more than Telstra. PAUL BONGIORNO: The market seems to… HELEN COONAN: And also, Paul, if I just may finish, and also provides guarantees for consumers. This is very important and people in rural and regional Australia need to have confidence that the Government will not be backing away from a regime that looks after them and will look after them into the future. PAUL BONGIORNO: The market seems to believe the executives rather than the Minister and the Government? HELEN COONAN: Well, I think what’s being said by executives needs to be based on fact and needs to be accurate, because if it’s not accurate then it’s getting to a stage where – I don’t know whether or not this will be the case – but the stock exchange may need to be informed, and it’s very important that misleading statements aren’t made about why the company is under pressure. Certainly, no case has been made that the – any pressures in the company are due to regulation – and, in fact, just the contrary because it’s managed to make $4.4 billion worth of profit with the light regime we have. JENNIFER HEWETT: When you say the stock exchange may need to be informed, what do you mean by that? HELEN COONAN: Well, I don’t know whether or not there is such pressure on the share price that there would need to be any information given to the stock exchange. That’s obviously a matter for the management and a matter for the board. But it is important, I think, from a public perspective that we say, well, what is – what are you being impeded from doing by the regulatory regime? We still don’t know what that is. The second point is, we have not seen yet how the existing regulatory regime is impacting at all On Telstra’s ability to make a profit. LOUISE DODSON: So you think the Telstra management might be deliberately talking down the share prices? HELEN COONAN: Look, I’m not going to be imputing motives to anybody. What I’m dealing with is facts here and the facts are that the government makes the rules about the regulatory regime. The management is there to look after the operational side of the company. And we are, as the Government, responsible for ensuring that there is a responsive consumer regime and that where the market fails we have targeted investment in rural and regional Australia to ensure that people will not be left behind, irrespective of whether the Government continues to own Telstra or whether it’s sold. PAUL BONGIORNO: Minister, just on media, won’t the changes that you outlined on Wednesday lead to Rupert Murdoch and Kerry Packer being able to keep the assets they have now and extend their influence in Australia? HELEN COONAN: I think the point I want to make, Paul, about that is that what I have flagged is a series of ideas. Cabinet has not made a decision yet as to what will be the media flesh-on-the-bones to our long-standing policy to relax foreign investment in media and cross-media. But what I’ve suggested is that we need a floor under diversity and obviously the ACCC will decide whether or not the kind of mergers that people might want to undertake will substantially lessen competition. So there are significant safeguards. PAUL BONGIORNO: Thank you very much for joining us today, Senator Helen Coonan. And coming up – the President of the National Welfare Rights Network, Michael Raper, and his fears on welfare reform. And the cartoon this week, from Bill Leak in the ‘Australian’ who hones in on Peter Costello’s leadership ambitions. Captioned – ‘Naked ambition’, Peter Costello tells a bewildered crowd, “I feel like I’m the Emperor already.” http://www.minister.dcita.gov.au/media/transcripts/meet_the_press_-_september_4,_2005_-_interview_with_communications_minister_helen_coonan_about_the_sale_of_telstra,_federal_liberal_party_leadership_battle,_nsw_liberal_party_leadership AMCoonan confident of improved Telstra services after saleAMThursday, 18 August , 2005  08:08:00 Reporter: Catherine McGrathTONY EASTLEY: The Communications Minister Helen Coonan says the sale of Telstra will enhance services to consumers, improve competition and modernise Australian telecommunications.From the sale, $800 million will be spent on broadband connections and other money will go to online education as well as online health.Communications Minister Helen Coonan is in our Canberra studio, to speak with her our Chief Political Correspondent Catherine McGrath. CATHERINE MCGRATH: Senator Coonan Good Morning. HELEN COONAN: Good Morning Catherine. CATHERINE MCGRATH: Haven’t the community already rejected this, with recent news polls showing 70 per cent of Australian don’t even want Telstra privatised? HELEN COONAN: I think that has to be balanced, Catherine, with a very similar figure which said that many Australians are now much more happy. I think the figure was something like 79 per cent were much happier, particularly people in rural and regional Australia, with the services that they’re now getting. So that, I think, balances the emotional attachment to Telstra, because we don’t need to own Telstra to regulate it. And I think that that’s a message that we can’t say enough, that owning Telstra doesn’t deliver good services. Properly regulating the telecommunications market, getting more choice for consumers, getting a proper mix of technologies as Mr Budde has just said – these are the sorts of things. Competition drives better outcomes for consumers, not the Government having a static ownership in a telecommunication company. CATHERINE MCGRATH: But when independents like Tony Windsor say it’s a massive con and the National Party will be destroyed electorally as a result of this, some of that message rings true in the electorate, doesn’t it? HELEN COONAN: Well not, I think, if you look at the total package. I mean, what was announced yesterday by the Government, I think is a strategic, even a visionary plan for future proofing telecommunications in Australia. It builds on a billion dollars already invested to get services adequate throughout rural and regional Australia and they’ve improved immeasurably. I mean, ten years ago people barely had a telephone. Now they’re worrying about how fast their broadband is. CATHERINE MCGRATH: But repair times are still slow. Peter Corish, you heard this morning, NFF, a reasonable person, an ally of the Government effectively, but he’s saying repair times are too slow. HELEN COONAN: Well, there’s both a universal service obligation that relates to basic telephony and a customer service guarantee that requires repairs within certain timeframes and a regulator to enforce those timeframes. So I’m not quite sure what he means. There’s a network reliability framework and indeed Telstra has earmarked $200 million to remediate exchanges. It hasn’t been announced, it was to be announced a couple of weeks ago, I understand it’s still on the table. That should address those very problems. CATHERINE MCGRATH: Well, Telstra wanted a lot more – $5 billion to be spent by the Government. Was their original claim outrageous, over the top? HELEN COONAN: Well, it was inappropriate in as much as firstly, Telstra was a late entrant and one of many proposals that have been brought to Government over the past several months as to ways in which we could look at this issue. Secondly, Telstra’s proposal would’ve locked us only in to Telstra’s technology choices rather than, as Mr Budde says, having a situation where you can have a combination of technologies, you can respond to where the new technologies go and you also encourage competition. We’ve got over 20, no sorry, 38 providers who roll out this kind of infrastructure in rural and regional Australia and we’ve got some fabulous new proposals where footprints, for instance, over pay television now may be able to deliver broadband in rural Australia. So you wouldn’t want to lock yourself in to just one choice. Telstra, on the other hand, will get a fair share, probably the lion’s share of a lot of these subsidies. CATHERINE MCGRATH: And yet Telstra is going to publicly once a month publish what it says is the financial impact of the new regulations, and it’s called your decisions yesterday draconian. Now, is that just sour grapes? HELEN COONAN: Well, I find that difficult to accept, because the regulation will be right when we’re at the end of this process and on the one hand you had the ACC suggesting that Telstra was too big to regulate, too difficult to regulate. On the other hand you had Telstra wanting less regulation, in fact the condition of Telstra’s proposal was that they shouldn’t… we should roll back regulation to allow them to do this. So, what I’ve come up with in between is something that has been developed with Telstra, to suit Telstra’s business model that should not have a huge financial impact on Telstra, but should have immeasurable benefits to the competitive environment. CATHERINE MCGRATH: What guarantee can you give Australians about broadband coverage, particularly in those black spots we heard about just then from Paul Budde – outer metropolitan areas? Will they get 100 per cent coverage? HELEN COONAN: Well, what we are proposing with this package, which is almost $900 million just for broadband alone, that’s before we get into the innovative broadband that we’ve… the clever networks that we’ve also provided another $113 million for. Once you do get this roll-out across Australia, we know we need to pass about another one million, three hundred homes under the old HiBIS scheme, we know what the take up is, we know this is all demand driven and we do have the money to deliver for all Australians. CATHERINE MCGRATH: Senator Helen Coonan thanks for speaking to AM this morning. TONY EASTLEY: And the Communications Minister was speaking with our Chief Political Correspondent Catherine McGrath. http://www.minister.dcita.gov.au/media/transcripts/am_-_coonan_confident_of_improved_telstra_services_after_sale http://www.minister.dcita.gov.au/media#mr

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2 Responses to “Central Planning : Soviet Style GozPlan Telephone Set – string attached to tin can”

  1. Expansion on a point per Illustration « Mangled Thoughts Says:

    […] “Regulation is a number of things: It is a tax. It compels firms to cash in capital to comply. It cripples the capacity of entrepreneurs to run firms to markets.” From, the item below “ Central Planning : Soviet Style GozPlan Telephone Set – string attached to tin can“. […]

  2. Expansion on a point per Illustration « mangledthoughts Says:

    […] “Regulation is a number of things: It is a tax. It compels firms to cash in capital to comply. It cripples the capacity of entrepreneurs to run firms to markets.” From, the item below “ Central Planning : Soviet Style GozPlan Telephone Set – string attached to tin can“. […]

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