Aussie ex-regulator sees merit in closer ties

Former Australian telecomms regulator Allan Fels sees merit in bringing transtasman telecomms regulatory regimes into harmony.

Former Australian telecomms regulator Allan Fels sees merit in bringing transtasman telecomms regulatory regimes into harmony.

Already the NZ Commerce Commission and the Australian Competition and Consumer Commission are in close contact, he says, and there is value in exchange of membership and legislative provision for information sharing, while each country maintains its own legal and regulatory systems.

“In the longer term, there is a case for moving towards merged legislation,” Fels told the Telecommunications Day conference at the weekend. “Different regulations inhibit trade and competition across a combined market.”

Fels contends that New Zealand’s late realisation of the need for a regulator has inhibited competition in this country. New Zealand didn’t tackle the powerful position of the incumbent in its market early enough, he says.

But he finds features to admire, even to Australia’s detriment in the New Zealand regulatory scheme. The ACCC’s generous rights of appeal have led to a cumbersome “negotiate, arbitrate, re-arbitrate” sequence which usually proceeds to its full length.

New Zealand’s Telecommunications Act, by contrast, limits appeals to points of law.

Light-handed regulation often makes it difficult to get the best results, he says. It can lead to “gaming behaviour” between the incumbent and the new party seeking interconnection or a wholesale or unbundling agreement.

On the basis of Australia’s experience, New Zealand, and specifically Telecom NZ, need not fear that a regulated access regime will discourage investment by or in the incumbent, he says. There is competition in Australia, but Telstra is still in a very dominant position, with a 91.4% market share overall.

The price of a typical bundle of telecommunications services has dropped by 29.4% in six years of deregulation.

“The industry has been transformed, with the addition of new players and some rationalisation. But we still lack truly effective competition,” he says. “Prices would be even lower if there was.”

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Tags telecomms regulator

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