Telecommunications Commissioner Douglas Webb has emphasised the difficulties of trade-offs when deciding the best parameters for competitiveness and cost in New Zealand’s telecommunications networks.
Webb, speaking yesterday to the Tuanz “Telecommunications Day” conference by video link from Sydney, reinforced a point that came out clearly in the Commerce Commission’s conference on the Telecommunications Service obligation (TSO): that low prices for telecommunications were not necessarily serving the same object as increased competition.
There are also potential trade-offs between one class of end user, who may benefit at a cost to another. The commissioner’s brief under the Telecommunications Act is to consider the “overall benefit” to all New Zealand-based end users. Even one user may experience a high price for one service as a reflection of the costs of providing for a low price in another, Webb says.
Screwing down prices in the short term might also lead telecomms providers not to invest in technological advance, which may raise prices and inhibit competition in the longer term. This results in a trade-off between today and tomorrow. The act refers to ensuring efficient competition “over the long term”, but Webb says he will not be interpreting that to exclude short-term benefits.
Part of the job is to resolve disputes between telecomms providers. The commissioner already faces the resolution of an interconnection dispute between TelstrsClear and Telecom and a ruling requested by TelstraClear on an appropriate level for wholesale purchase of Telecom services.
Webb was in Australia conferring with competition bodies there. His address was a lead-off to a set-piece sequence of addresses from major providers and one consumer, Police IT manager Rohan Mendis, on “Benefitting from a Competitive Market”.