Telcos demand merit-based reviews

Decisions should be reviewable by the High Court: Vodafone

Vodafone and TelstraClear are seeking limits to what the telco regulator can do, according to submissions made to parliament’s Finance and Expenditure Committee, which is currently discussing the Telecommunications Regulation Bill.

Vodafone wants merit reviews of the Commerce Commission’s work by the High Court. Furthermore, Vodafone says regulatory decisions should expire after five years. It also wants commercial agreements with wholesale customers to take precedence over regulation mandates.

The cellular phone operator is currently the target of regulatory action by the commission over its mobile termination rates. These are said to be some of the highest in the world. But Vodafone is vehemently opposed to reducing them to the level proposed by the commission — 15¢ per minute.

Chief executive Russell Stanners says merit-based reviews are common overseas and shouldn’t derail regulation processes at all.

“What we want are decisions made faster, but quality decisions, and the best way to ensure that is through merit reviews.”

Through its chief executive, Alan Freeth, TelstraClear says in its submission that urgency is key. New Zealand has lots of lost ground to make up, when compared with other markets that have already unbundled the local loop, TelstraClear says.

However, Freeth says TelstraClear doesn’t want the commission to have the power to set prices for any commercial deal and opposes structural separation of Telecom.

This is to encourage Telecom to continue investing as well as to speed up the regulatory process. Accounting separation is as far as TelstraClear wants to go.

Spokesman Mathew Bolland says TelstraClear wants to see certainty in the market for investors.

“We need certainty and having any decision made by the commission referred to the general courts wouldn’t give the market that certainty.”

Bolland says expecting a general court to rule on highly technical regulatory matters would be unfair to all concerned and instead, TelstraClear would like to see some kind of review tribunal as has been established in the UK and Australia.

“Even a merits review that requires the decision to be introduced while the review takes place doesn’t give certainty because you’re not going to invest in a rollout if you think it might be undermined after a review comes in.”

To further avoid disputes over what is covered by the commission’s decisions, TelstraClear wants specific and detailed service descriptions.

Stronger enforcement powers and higher fines for non-compliance are an important part of the regulatory formula, TelstraClear adds.

InternetNZ, which has also submitted on the new regulation (see page 3), says it remains agnostic towards the concept of merit reviews.

Its executive director, Keith Davidson, says there are risks with merit reviews if they delay the regulatory process, or make it unaffordable for smaller industry players. However, Davidson adds that it is also valid to say that no decision by a regulator should be beyond appeal.

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