House of Representatives

Second Reading Speech

Mr Malcolm Turnbull (Minister for Communications)

Submarine cables are an important component of Australia's telecommunications infrastructure. They carry the bulk of Australia's international voice and data traffic. Submarine cables provide a vital link for Australia to the global telecommunications network and the global digital economy.

Submarine cables have been in use for over 150 years, beginning with submarine telegraph cables. The first connection between Australia and the rest of the world by submarine cable was the Java to Port Darwin telegraph link in 1872. This in turn was connected to the populous southern capitals by the iconic Overland Telegraph Line built by Charles Todd.

In the 20th Century, submarine cable technology evolved as the demand for alternative and faster communication grew. In 1956, the first submarine cable incorporating repeaters came into operation across the Atlantic. In 1988, developments in high-speed and high-capacity transmission over fibre optic cables enabled the transmission of vast quantities of information. Modern submarine cables typically provide multiple terabits per second of capacity when deployed and can be further upgraded, well positioning them to meet future traffic levels.

As an island nation, Australia and its economy is especially dependent on submarine cables. As such, damage to submarine cables can have a significant impact. There are currently seven international submarine cables connecting to Australia that are in operation. The main players are Southern Cross Cable Ltd which operates the Southern Cross Cable, PIPE International which operates PPC-1, Telstra which operates APNG-2 and Telstra Endeavour, and Singtel and Reach which operate the SEA-ME­WE 3 cable.

That is why in 2005 the previous Coalition Government established a regime for the protection of international submarine cables landing in Australia, in the form of Schedule 3A of the Telecommunications Act 1997.

The regime gives the industry regulator, the Australian Communications and Media Authority or the ACMA, the power to establish protection zones around international submarine cables of national significance. In protection zones, certain activities are prohibited or restricted from taking place including some kinds of fishing, trawling and mining.

The regime also establishes an installation permit system. Carriers seeking to install an international submarine cable that will land in Australia must apply for a permit to install the cable.

To date, the ACMA has declared three protection zones - the North and South Sydney Protection Zones and the Perth Protection Zone. Since the introduction of the regime, there have been no reported incidents of cable damage in Australian waters.

Australia's regime has been praised by both the International Cable Protection Committee and the Asia-Pacific Economic Cooperation as a global best practice regulatory example for the protection of submarine cables.

In 2010, the ACMA undertook a statutory review of Schedule 3A. Based on feedback received from industry, the ACMA made several recommendations to improve the operation of the regime.

These recommendations form the basis of the amendments proposed in the Bill, along with other proposals that have been identified by the Government and stakeholders that will further enhance the regime.

The amendments fall into five categories.

First, the Bill will ensure consistency between the regime and the United Nations Convention on the Law of the Sea, also known as UNCLOS. UNCLOS sets out coastal nations' rights and obligations in relation to the seas and oceans, including Australia's right to regulate foreign ships and persons beyond its territorial sea.

While it has not been a practical issue to date because the ACMA is required to consider UNCLOS when it exercises its powers, some concerns have been expressed that the regime may seek to regulate foreign nationals for certain actions in waters of the Exclusive Economic Zone or Continental Shelf in a manner inconsistent with international law, including UNCLOS. To the extent that the regime is used as a model by other jurisdictions, this carries the risk that other jurisdictions may replicate this model.

The Bill addresses this by modifying the regime's application, including criminal and civil enforcement options, to foreign ships and nationals in the waters beyond Australia's territorial sea.

Second, the Bill will provide a structured process for the consideration of matters within the Attorney­General's portfolio in relation to submarine cable installation permit applications by:

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requiring the ACMA to consult with the Secretary of the Attorney-General's Department on installation permit applications; and

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giving the Attorney-General power, after consultation with the Minister for Communications and the Prime Minister, to direct the ACMA to refuse a permit on security grounds.

During the consultation period, the Secretary of the Attorney-General's Department may make a submission on the permit application, which may include a recommendation about the conditions that should be specified in the permit.

These are mechanisms to enable matters including security, international law and native title that may affect submarine cable installations to be considered.

The changes formalise existing practice. The proposed provisions are based on the current carrier licence application provisions under the Telecommunications Act and are familiar to industry.

Third, the Bill will enable significant domestic submarine cables - that is cables that connect two places in Australia - to be brought under the regime and be suitably protected under the regime if appropriate. The Bill will give the Governor-General power to specify in regulations that a domestic cable or route warrants protection. The ACMA would then have discretion to decide whether a protection zone should be declared around that cable or route. Consultation would be required before any regulations were made and any new protection zones specified. Carriers will also be able to install domestic submarine cables in protection zones by applying for a permit to do so. This is something not currently possible under the regime as currently in force.

Fourth, the Bill will streamline the installation permit process so that:

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carriers only need to apply for and obtain one type of permit to land a cable in Australia (whereas now they could require two applications, one for a permit zone and one for outside it);

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the default timeframe for processing a non-protection zone permit application will be reduced from 180 days to 60 business days; and

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processes under the regime that duplicate existing processes under the Environment Protection and Biodiversity Conservation Act 1999 are removed.

These amendments will reduce red and green tape - a key focus of our new Government and something I will have a lot more to say about in the coming months with regards to the telecommunications sector.

Fifth, the Bill will make several administrative and technical amendments to enhance the overall operation of the Bill. This includes:

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expanding the list of authorities the ACMA must notify when it declares, varies or revokes a protection zone to include relevant authorities involved in sea monitoring, offshore law enforcement and management activities; for example the Australian Customs and Border Protection Service;

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permitting minor deviations to the routes of submarine cables;

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requiring permit applicants to notify the ACMA of any changes to their application;

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permitting the ACMA to publish a summary of a proposal to declare, vary or revoke a protection zone in the newspapers and the electronic Commonwealth Gazette, while ensuring the full proposal to be published on its website;

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requiring the ACMA to provide reasons if it declares a protection zone that is different to the original request; and

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clarifying that prohibited or restricted activities in a protection zone do not include activities associated with maintenance or repair of a submarine cable.

To support the legislative framework, the Government continues to work with stakeholders both domestically and internationally to increase the resilience of submarine cables to disruption. Australia is the first government member of the International Cable Protection Committee, a peak international body that brings together submarine cable owners and operators and national governments to discuss issues associated with submarine cables.

Australia is one of only a handful of nations that has a dedicated regime for the protection of submarine cables. The Bill will ensure that Australia's regime continues to be a best practice regime and the protection the regime affords to this vital infrastructure is maintained.

Submarine cables ensure our connectedness to the rest of the world. They are vital components of our telecommunications infrastructure.

The private sector has responded well to growth in the demand for international submarine cable capacity, and is well aware of the potential for future traffic growth. Further investments in cables, especially on the Perth to Singapore route, have been announced by the Nextgen Group, SubPartners and Trident. Several cables off the east coast of Australia have also been announced. SubPartners and Hawaiki Pty Ltd have announced proposals to construct cables that connecting Australia and the US. Telstra, Vodafone NZ and Telecom NZ have recently announced a joint venture to build a cable to connect Australia and New Zealand.

But connectedness isn't just about ensuring our submarine cables or satellite links or even backhaul fibre are of a high standard - it is just as much about ensuring that Australian mums and dads, school kids or small business people can take advantage of the resources and opportunities of the internet.

That's why our Government is delivering a better NBN. Our NBN will deliver fast internet sooner to Australians at less cost to taxpayers and at a more affordable price for consumers.

Unlike Labor, we commit to prioritising the NBN rollout in areas with the poorest services so that those who currently can't connect, or have the poorest speeds, get fast broadband sooner. Under Labor many areas with poor broadband services would have been waiting for 10 or more years before being connected while many with access to fast broadband received further upgrades ahead of those in need.

Plainly, Labor's priorities were wrong and they simply failed to deliver.

By rolling out a more affordable NBN with greater potential for competition we will also ensure that more families will be able to afford a home internet connection. More affordable services will mean that more kids can do their homework, more online entertainment can be streamed and more innovative digital services can be accessed. The biggest impediment to internet access in Australia is, of course, cost - with our smarter approach fewer families will be priced out of the digital economy.

The Coalition's approach has connectedness at its core. I'm pleased that this Bill will strengthen laws relating to the submarine cables that connected us to the world and I am excited about our plan for a better NBN which will mean that more Australians will be able to connect to and take part in the digital economy.