DELIVERED IN THE HOUSE OF REPRESENTATIVES

The Radiocommunications Legislation Amendment (Reform and Modernisation) Bill 2020, introduced with the Radiocommunications (Receiver Licence Tax) Amendment Bill 2020 and the Radiocommunications (Transmitter Licence Tax) Amendment Bill 2020, amends the Radiocommunications Act 1992 to modernise the policy and regulatory framework for spectrum management in Australia. It is intended to address significant changes to the technological landscape since 1992, to add flexibility, remove unnecessary prescription and legislative barriers and improve processes and help the framework remain fit for purpose in a rapidly changing environment.

Labor acknowledges the high value of spectrum in Australia and understands that a suite of technologies are set to revolutionise the digital economy. Globally, it is recognised that technological innovation and market and service convergence is placing increasing pressure on spectrum management in terms of its complexity, cost and responsiveness. The spectrum review identified the need to update the law to address the truly dynamic and evolving communications landscape.

Australia's spectrum policy and management framework was drafted 30 years ago, and while the framework has served us well, a good fifth of that time has been spent reviewing and reforming it. Labor welcomes these proposals to modernise the framework. Labor supports this bill. Labor notes the pragmatic approach adopted by stakeholders and their general desire to secure some practical, sensible reform. We too adopt this pragmatic stance on the progress that has finally been made. We acknowledge the significant efforts that have gone into spectrum review and reform by the department, the Australian Communications and Media Authority and industry in particular. Equally, Labor acknowledges stakeholder fatigue on this years-long reform process.

Labor won't stand in the way of regulatory updates that, to a large extent, play catch up with the regulator and streamline processes that, years ago, were identified as cumbersome. But we do note that, after so many years, this government has failed to achieve all the recommendations of the spectrum review. After such a significant investment of time and resources by government and industry, this government has proved incapable of implementing reform to address issues that, years ago, they said warranted that reform.

I want to turn to the issue of delay. The bill is the output of a complex and protracted spectrum review and reform process, which commenced over six years ago. According to the government's own timetable for implementation, this reform is well overdue. The bill now before parliament was introduced over three years after the original mid-2017 indicative timetable for passage of the new legislation. The delay means the ACMA has conducted spectrum auctions without the benefit of the streamlined approach, which was identified as a key area in need of reform some time ago.

It's ironic that a bill to clarify the minister's policy role in spectrum management has suffered setback and delay as a result of a lack of policy coherence and clarity from the minister. On many issues this government seems incapable of formulating coherent policy or adhering to it. Spectrum reform has been no exception. Australia has experienced seven years of this government's influence on communications policy. Over this period the contribution of ICT to Australian GDP relative to OECD nations has declined. Furthermore, Australia ranks second last among OECD countries for relative size of the technology sector and its contribution to the economy. We've seen the rollout of 4G and early 5G deployment, and yet there is still no sign of a comprehensive 5G deployment strategy for Australia or an AI strategy. There is nothing which shows ambition or substance when it comes to the potential of this sector in supporting productivity and inclusive economic growth and nothing about remaining competitive in the region and globally. What we have seen is a government that lacks a coherent agenda and as a consequence doesn't appear to be in command of the few processes it has commenced.

The innovation agenda turned out to be little more than a slogan. The sole outcome of the USO review was to produce a new three-letter acronym. The Digital Transformation Office became the Digital Transformation Agency, just as the Children's eSafety Commissioner became just the eSafety Commissioner. And then there's spectrum reform. In May 2014 the then Minister for Communications, Malcolm Turnbull, asked the department of communications and the ACMA to undertake a review of spectrum management. The terms of reference went beyond point-in-time streamlining and deregulation in an attempt to craft a more flexible framework suited to the challenges of a complex and rapidly-changing communications environment.

In May 2015 the government released the report of the review. The report found there were substantial deficiencies with Australia's 20-year-old spectrum management regime, which was described as slow, rigid and administratively cumbersome. In August 2015 the minister, in a joint release with the then parliamentary secretary to the minister, announced the government's agreement to implement the recommendations of the review with an indicative timetable of mid-2017 for the new framework. It was all going to be done and dusted in around two years.

In May 2017 an exposure draft for a 2017 bill was released for consultation by then communications minister Senator Mitch Fifield. At the time, Labor welcomed progress on the significant and complex reforms but also noted with caution that the overarching policy intent on key matters was yet to be articulated. The consultation was conducted in the absence of draft ministerial policy statements as fundamental as the single licensing system, including licence issues and conditions and renewal rights, for example. This meant the exercise was challenged by chicken and egg style absurdity. Ultimately the biggest reform of spectrum policy and its management framework in a generation ground to a halt.

Some time later, in June 2019, the current minister for communications indicated that he would not restart the stalled spectrum reform process until he was satisfied that the proposed new regime would provide superior benefits to the system it was to replace. So, four years after starting the reform process, the new minister was back at square one asking basic questions such as: What benefits will the proposed reforms deliver? Is wholesale or incremental reform necessary? That is, he had to reconsider the decision he had made in August 2015.

One would assume that the government had a well-considered view on such questions before deciding to commit years of significant public sector and industry resources to a wholesale reform process. The point is that the stalled work program is emblematic of a government without a coherent sense of what it is trying to achieve. For all their rhetoric about the need for efficiency and certainty for industry, they've been unable to deliver on it throughout this process.

In late June 2020 the exposure draft of the 2020 bill was released for a short three-week consultation period. Finally, in August 2020, the introduction of the bills into parliament was met with industry press CommsDay reporting a departmental insider describing the spectrum review and reform process as 'the Canberra version of Hollywood development hell'. Indeed! Ultimately the project wasn't abandoned, but it certainly hasn't been fully realised either.

I want to return to reforms not achieved and there being no certainty. Spectrum reform is yet another example of this Liberal-National government failing to do what it says it will do. Not only is the bill before the parliament over three years late; it doesn't address all the recommendations of the spectrum review. A number of issues that were identified for reform are not being progressed at this time. The bills do not integrate the management of broadcasting spectrum or create a single licensing system, for example. The department explained why, stating that the consultation which had occurred in 2017 indicated significant concerns about the approach that was being proposed in terms of the complexity, the transition costs for stakeholders and the number of issues that the department and the government then needed to work through in terms of considering where to in light of the views expressed during that consultation process.

The department provided more information about the transition costs associated with a single licensing system on notice:

After considering the responses to the 2017 consultation process, as well as views received through subsequent additional stakeholder engagement, the Department undertook further work to identify a possible transition pathway to a single licensing system.

The transition to a single licensing system would involve the transitioning of over 167,000 apparatus licences (with over 60 licensing options) to the new system. The transition of spectrum licences would have, in effect, required two regimes to operate in parallel for an extended period, likely to be in the order of six years, with complex arrangements necessary to manage the transition from a spectrum licence to the single licensing system to protect the rights of licensees. Maintaining this two-regime approach for a number of years would have introduced inefficiencies during the transition period, requiring the resources of spectrum users and ACMA to be dedicated to supporting the transition, and maintenance of two sets of systems and processes for an extended period.

In relation to the management of broadcasting spectrum, the department explained that one of the things the 2017 consultation process drew out was the complexity and potential changes to the broadcast spectrum arrangements, so the government made a decision to focus on priority reforms that will achieve quicker benefits to spectrum users.

In terms of when future changes to broadcast spectrum arrangements may be addressed, the department said it would be a matter for government in light of broader broadcast policy and media objectives. The government has not outlined how or when these things may be addressed in future, beyond a general business-as-usual commitment to continuous reform. At inquiry, the department was asked whether it will undertake ongoing cycles of review and targeted legislative reform and whether there is a plan for that to happen. The department advised:

I think we would regard that as almost our business-as-usual approach in terms of ongoing responsibility for administration of the legislation and regular check-ins with stakeholders. There isn't a specific process mapped out for reform by another deadline at this stage.

So the government provided no certainty or predictability around its ongoing reform agenda in this area. In the meantime, there will be a focus on implementing the proposed reforms.

Turning now to the proposed reforms that do address the recommendations of the spectrum review, it is instructive to consider how substantial they actually are. The bill amends the Radiocommunications Act 1992 to clarify the object of the act. But while the legislative objects may have been simplified, the complexity of spectrum management remains. Meanwhile, the changes to the object give rise to a degree of uncertainty for the public broadcasters, the ABC and the SBS, which they outlined in their submissions and at the inquiry into the bill. As the ABC states:

There are conceptual and practical benefits in clarifying the overarching object of the Act and streamlining the aims that sit beneath it. It is also important that the aims reference both the commercial and non-commercial uses of spectrum.

As currently drafted, the use of spectrum by public broadcasters is not explicitly recognised as one of the vital non-commercial uses of spectrum; proposed new paragraph 3(b)(ii) currently references only "defence purposes, national security purposes and other noncommercial purposes (including public safety and community purposes)". In the ABC's view, the stated "other non-commercial" uses of spectrum in the legislation is not sufficiently broad.

The ABC submits that, to underline the importance of public broadcasting, the new Object section of the Act should explicitly include the term "national broadcasting purposes" as one of the non-commercial uses of spectrum … This is particularly important given that the Object section is a key interpretive provision of the Act and will be used as a reference point for future ACMA spectrum decisions, including application of the proposed new "public interest test" when considering the renewal of licences for periods of 10 years or more. In the alternative, at a minimum, the ABC submits that the term "public services" should be added to the stated noncommercial uses of spectrum.

In the absence of this type of amendment to the Object of the Act, there is potential for future spectrum decisions to place too little weight on public broadcasters' use of spectrum vis-a-vis commercial uses in instances where these uses may be in direct conflict.

The government's responses as to why this was not addressed were not altogether persuasive.

Another change is that the bill requires the ACMA to prepare an annual work program covering a minimum five-year period to support transparency—a good idea. The thing is, the ACMA has been doing this for over a decade already, with the publication of its five-year spectrum outlook, or FYSO, since 2009. The bill merely plays slow catch-up in this regard.

The bill also updates the system for equipment regulation to better reflect modern spectrum needs and supply chains. Device supply systems and equipment regulation will be streamlined, and the ACMA will be empowered to provide new exemptions in appropriate circumstances to facilitate testing, development and manufacturing of otherwise controlled devices. Again, the updated equipment arrangements also reflect much of what the ACMA has been already doing—something the department and industry both acknowledge.

On compliance and enforcement, the introduction of a modernised compliance and enforcement regime with more graduated enforcement mechanisms for breaches of the framework gives the ACMA a greater range of options beyond the institution of criminal proceedings. Again, it is not groundbreaking stuff. This aligns the framework with the general and established trend of empowering regulators with graduated compliance and enforcement options, something the regulator has been focused on for some time, including in other areas of its remit.

The bill also amends the act to provide for the minister to issue ministerial policy statements, which the ACMA must have regard to in exercising its spectrum management. The roles of the minister and the ACMA are clarified. The minister will have less involvement in day-to-day spectrum management decisions that are properly the responsibility of the regulator and will have the power to issue ministerial policy statements to guide the ACMA in its spectrum management functions. Spectrum allocation and reallocation processes have been streamlined. The ACMA will have greater flexibility to develop fit-for-purpose allocation arrangements in order to bring spectrum to market within shorter time frames where this is appropriate. This fixes some known issues such as the need for bespoke solutions to shortcomings in the system. However, it does not address the growing need for the ACMA to be able to defragment spectrum at the end of 20-year spectrum licences to ensure the most efficient use of spectrum while minimising the cost and disruption to government and other operators of having to clear spectrum—an issue that I'll return to shortly. The flexibility and regulatory barriers between licence types have been improved. The maximum licence term for both apparatus licences and spectrum licences will be extended to 20 years, with fewer regulatory barriers and more flexibility in the allocation process, and clearer processes governing renewal of licences.

I want to turn to the efficient use of public resources and, in particular, community television. Labor is concerned that, for all its rhetoric about efficient use of the spectrum and the benefits of reform, this government is unable to walk the talk. For example, this government wants community television broadcasters to move off air to an online-only model of delivery, despite there being no planned alternative use for the spectrum they now occupy. The minister's mishandling of the relatively straightforward matter of the extension of community television broadcasting licences—which the minister left until the eleventh hour in June 2020 and plans to end in June 2021—demonstrates an inability to govern with predictability in the public interest.

The benefits of community TV are many. Australia has one of the most concentrated media markets in the world, and community TV provides much-needed diversity and localism. At a time when newsrooms are closing, community TV supports local news and provides a training ground for emerging journalists and screen practitioners, including in partnership with universities. At a time when social cohesion, national culture and identity should be fostered, community TV provides a platform for local multicultural, sporting and arts events as well as small business. At a time when social distancing makes participation in religious services difficult, community TV provides accessibility, particularly to elderly citizens without internet access.

Community television has been serving Australian audiences for 25 years, but the Morrison government wants to boot Channel 31 Melbourne and Geelong and Channel 44 Adelaide off air. This minister's disregard for the valuable use of spectrum by community television broadcasters underscores the need for clear legislation and clear roles as between the minister and the ACMA. Labor appreciates the importance of getting spectrum reform right and the cost and complexity of failing to strike the right balance between flexibility and certainty when it comes to spectrum management. That is why Labor is concerned that this government has missed an important opportunity to ensure sufficient flexibility for the ACMA or the government to defragment spectrum licensed holdings where existing configurations represent a very wasteful use of spectrum. Where the use of spectrum is wasteful, it can result in costly and disruptive refarming exercises.

According to submission 181 by Professor Jock Given and Mr Giles Tanner to the House of Representatives Standing Committee on Communications and the Arts' inquiry into the deployment, adoption and application of 5G in Australia, this issue is growing even bigger in future as technical standards evolve. Giles Tanner is a senior research fellow at Swinburne University of Technology. Until December 2018, he was the head of the ACMA's division responsible for radio frequency spectrum management. Jock Given is Professor of Media and Communications at Swinburne University of Technology and chief investigator on an Australian Research Council funded project, 'Spectrum after scarcity: rethinking radiofrequency management'. Their submission examined the shortcomings of the Radio Communications Act 1992 that may hinder deployment of 5G and other advanced technologies, and made legislative reform recommendations designed to overcome them.

Around the world, including in Australia, governments place a high priority on work to make additional spectrum available for 5G and other advanced wireless broadband technologies. As it turns out, the bill addresses the recommendation that the ACMA should have greater flexibility to create and issue new spectrum licences, including wider recourse to administrative rather than price based allocation where appropriate. However, the bill does not address recommendation 3:

The ACMA’s power to re-issue spectrum licences in the public interest and the Minister’s power to make class of services determinations should be reviewed so as not to compromise the regulator’s freedom to optimise the efficient configuration of a band or bands following licence expiry. For example, the ACMA could be empowered, with sufficient warning and following proper consultation, to offer a different licence, of equivalent or greater utility, if to do so would maximise the overall public benefit obtained from the band or bands in question.

The current system critically relies on markets to do this. The high-grade fully tradeable nature of spectrum licences means licensees can negotiate some of these changes themselves. And when they don't hold all the spectrum that is required, which is also going to be an increasingly common scenario in future, the new law will allow the ACMA to simply directly allocate spectrum licences to a person, meaning that, between them, carriers and the ACMA have a lot of discretion to negotiate for more efficient configuration of existing spectrum licensed bands. The trouble is that everyone has to agree, and it often doesn't suit carriers to agree on the most efficient overall configuration of a band.

As we move from a norm of 15-year to 20-year spectrum licences, the very long tenure proposed for spectrum licences, combined with administrative renewal, does call into question what the government's reserve powers might be to push markets to utilise spectrum efficiently, at least as licence renewal time approaches.

At the hearing on this bill, Labor asked the ACMA if the proposed bill helps it deal with rapid change, the speed of evolution, and the efficient use of bands in relation to defragmentation. An ACMA official confirmed that yes, the process changes that are enabled by the bill allow the ACMA to do this through consultation with industry, whereas in the past they had to make multiple steps through the minister. There is greater freedom in process, to do things faster, where appropriate. When asked whether it would be useful to have the power and flexibility to solve issues by defrag of spectrum, the ACMA official said:

The ability to defragment either at the end of a licence term or, if possible, through agreement in the middle of a licence term does improve the spectrum efficiency and therefore could potentially decrease the pressure on finding additional spectrum to be made available. So I think the answer is: potentially, yes, in the circumstances, it could help.

It is anticipated that this issue will have to be revisited in future. Of course, it isn't just inflexible spectrum management processes that are costly. Policy and regulatory reform is costly to industry and to government. Government resources applied over a number of years are significant and involve many stakeholders, as was advised by the government and the ACMA in answers to questions on notice to the Senate Standing Committee on the Environment and Communications.

In conclusion, Labor supports reform to modernise the spectrum management framework to assist government and industry, given the high value of spectrum and the rapid pace of technological change. The benefits of the bill include reduced regulatory barriers, more-efficient spectrum management processes, and more-proportionate compliance and enforcement options. Labor acknowledges industry stakeholders who have participated in multiple round tables, meetings and consultations and made many submissions at considerable time and cost, and the public servants who have been working to settle the reforms in this complex area for years.

I acknowledge the Senate scrutiny of this package in the public interest. This scrutiny has prompted the minister to provide advice on a range of matters, including the use of computerised decision making by the ACMA; whether ministerial policy statements should be legislative instruments; whether the regulation of equipment should be left to delegated legislation; and whether the ACMA should be able to exempt people from the compliance provisions in the act by legislative instrument. The committee also asked that further information be included in an addendum to the explanatory memorandum, which I understand will be tabled by the minister.

In closing, I emphasise the importance of getting spectrum reform right, given the far-reaching consequences of the changes, and the government's inconsistency on the policy scope and delay in the delivery of these reforms. Labor supports this bill and emphasises that getting spectrum reform right is not a set-and-forget task. It is imperative that the government develop a clear reform agenda as the experience of operating under the new framework informs future reforms. As Chris Althaus, the CEO of AMTA, said to the committee inquiry on the bill:

If there were a lesson to be learned from this whole process—and this is really important from our point of view—it is that, with such a dynamic environment , government needs to stay more attuned to the incremental changes that could be applied to the new act in the next licence period, for example. So there's been a lesson learned, I think: we all need to stay attuned to change and adapt. That's becoming more and more important, given not only the complexity of the spectrum environment but also its fundamental importance, as we've seen during COVID, to how we live our lives. We've got to get it to an optimal level at every step, and, if we need to do that through incremental change, so be it.

To that end, I move the second reading amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes:

(1) the economic value of electromagnetic spectrum in Australia has been estimated at $177 billion over 15 years;

(2) the rapid evolution of technology and markets is placing increasing demands on spectrum management;

(3) the cost and complexity of failing to strike the right balance between flexibility and certainty in spectrum management;

(4) the work of the Senate Standing Committee for the Scrutiny of Bills, the Senate Standing Committee on Environment and Communications and the Parliamentary Joint Committee on Human Rights on the proposed reforms; and

(5) that the proposed reforms do not address all of the recommendations of the 2015 Spectrum Review report and were introduced over three years after the Government’s own timetable for implementation".