ComCom split on mobile termination regulation

Anita Mazzoleni breaks with other commissioners to recommend regulation

The Commerce Commission is split over the regulation of mobile termination access services, with commissioner Anita Mazzoleni breaking with the other two commissioners investigating the issue.

The Commerce Commission delivered its final report on mobile termination access services to ICT minister Steven Joyce today, including the individual recommendations of the commissioners.

Telecommunications Commissioner Dr Ross Patterson has recommended that the Minister accept Telecom’s and Vodafone’s final undertakings as an alternative to regulation. Associate Commissioner Gowan Pickering’s view agreed with Dr Patterson’s recommendations.

However, commissioner Anita Mazzoleni’s view is that mobile termination access services should be regulated.

The report concludes the commission’s investigation into whether it should recommend that mobile termination access services be regulated under the Telecommunications Act or whether commercial undertakings should be accepted as an alternative to regulation.

During the investigation, Telecom and Vodafone offered undertakings that will reduce mobile termination rates over time.

Patterson said, “I have concluded that both regulation and acceptance of the final undertakings would address the competition concerns that the commission identified. In my view, the long-term interest of consumers will best be served by applying the least intrusive means to address the competition concerns identified in the investigation. This will allow market forces to continue to operate in areas outside the scope of intervention.”

“The final undertakings from Vodafone and Telecom have offered mobile termination rates that are significantly lower than those offered in earlier undertakings. While these rates remain above the range of the Commission’s cost-based benchmarks, they address the competition concerns identified by the Commission, and my recommendation is that they be accepted by the Minister,” said Patterson.

Commissioner Anita Mazzoleni said that while undertakings will deliver a reduction in mobile termination rates three months earlier than a regulated outcome, the consequence is that mobile termination rates will remain significantly higher than the Commission’s benchmarks during the five-year period of the undertakings and remain higher at the end of the undertaking period.

"In my view, the barrier arising from the prices in the final undertakings continues to ensure an uneven playing field, and this will impede the benefits competition will otherwise deliver to New Zealand consumers.”

The commission says it will be making no further comment.

Mobile termination prices are the wholesale charges mobile phone companies charge for terminating calls or texts from other fixed or mobile networks.

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