Let sleeping dogs lie

The Commerce Commission could learn a lesson from its Australian counterpart, argues Paul Brislen

I’m often struck by the contrast between Australia and New Zealand. Theresa Gattung may well have put it best when she said “We think they are our friendly cousins and they think we are their munty next-door neighbours”.

When it comes to the business world Australians take no prisoners, would sell their grannies for a lump of coal and generally don’t muck about. The same can be said for the folk in the Australian Competition and Consumer Commission (ACCC) and its various offshoots and compatriots in the country’s federal government. They take their job as industry choke chain very seriously and approach every issue with one issue uppermost in mind: will the consumer benefit from this?

When you compare that approach with the line taken by our Commerce Commission, the differences in culture are evident. The commission seems to be of the opinion that nothing it will do should make an impact on the business world except in the most extreme case. Only reluctantly will the commission be woken from its slumber and sent into battle. Like an old Labrador, the commission likes to keep one eye on events from its favourite rug in the kitchen by the oven.

The contrast couldn’t have been more apparent than last week. In Australia the ACCC came out swinging, telling Telstra it was discriminating against its rivals in the ISP market by favouring its own retail arm ahead of others when it came to provisioning DSL and local calling options.

The ACCC is keeping a “close eye” on Telstra and is “concerned” about its market power and about its high levels of vertical and horizontal integration, according to Australian media reports.

Stern words indeed, but not too dissimilar to Telecommunications Commissioner Douglas Webb’s cry that he would be “riding close herd” on Telecom with regard to its wholesale regime. Webb made it abundantly clear that if Telecom did not knuckle down and deliver more under the very light-handed regulation he’d handed down he would be forced to consider regulating in a more heavy-handed manner. He raised the spectre of “structural separation” as something that was happening elsewhere in the world and did so with one steel-grey eyebrow raised archly.

Sadly, someone forgot to tell the Labrador, which has yawned, stretched, scratched itself and gone back to sleep.

The commission has received numerous complaints from customers about broadband provisioning but declined to act based on the most spurious of logic. Apparently the commission will only be concerned if these issues “reduce competition in the long run, to the detriment of consumers”. Of course, should that happen it will be far too late for any action the commission takes to have any impact whatsoever. The fair and level playing field of wholesale broadband will have vanished and it will be an uphill struggle trying to wrest customers off Telecom Xtra.

This is not riding “close herd” as I take the quote to mean. Telecom is missing the target for wholesale provision. Telecom is already facing court action for misusing its market dominance to “prevent or deter competition in markets involving high speed data transmission”. Surely the commission can do more than just keep an eye on the issue?

(As I write this we’re pouring over Webb’s “statement for consultation” on TelstraClear’s application for bistream access and it certainly does appear to be strongly worded indeed. We’ve seen that before, however, so we’ll keep a watching brief on that one.)

David Cunliffe looks likely to be returned as minister of communications and he has indicated the review of the telecommunications act will include provision for a complaints service. At the very least I would hope this new agency would be given enough firepower to tackle such issues, because it seems clear to me the commission is quite cosy and does not wish to be disturbed, thank­you very much.

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Tags competitioncommission

More about Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionTelstraClearTelstra CorporationXtra

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