Attitudes mellow towards telco regulation

By RICHARD BRADDELL

A regulator operating from within the Commerce Commission is expected to be the Government's preferred option for the telecommunications industry.

The chairman of the Telecommunications Users' Association (Tuanz), Judith Speight, told a summit of the chief executives of major telcos that the Government stance had been indicated in recent discussions with ministers following the Fletcher inquiry.

There seemed to be general acceptance at the Wellington summit that the Government would opt for a regulatory structure involving an electronic communications commissioner, but not stand alone as proposed by the telecommunications inquiry.

But while the commission's capacity to undertake the functions of the proposed commissioner has been called into question, an Australian competition expert said privately that the same concerns had been raised in Australia when a similar responsibility was placed on the Australian Competition and Consumer Commission (ACCC).

Rather than subsuming the commissioner's role, the ACCC had become more attuned and responsive to telecommunications issues, he said.

Telecom's Theresa Gattung focused most strongly on the Kiwi share proposals, which she said would force Telecom to underwrite the cost of technological developments in unprofitable rural areas.

Vodafone chief executive John Rohan showed his attitudes had changed since July's impassioned opposition to reform of the regulatory environment, which followed the release of the inquiry's draft report.

He justified his new position on the basis that the original draft did not address consumer concerns and benefits.

Arguing that there should be an industry commissioner operating out of the Commerce Commission, he said that to set up another independent group paralleling the commission would be a waste of resources.

He said the fulltime commissioner should be responsible for "designated" services (those to be regulated), but rejected the inquiry's proposal that a lesser level of "specification" (which would not involve price control) should be created because that would lead to the slippery slope of regulatory creep.

Suggesting that an industry ombudsman would be a quick and cheap way of settling most consumer disputes, he said it would also ensure that companies got their billing systems into shape.

He also said an independent arbitrator in dispute settlement would ensure the commissioner did not become another industry bottleneck.

"We are happy with the structure which is beginning to emerge," Mr Rohan said.

"Our major concern was that the consumer was getting lost in the debate.

"We think the model proposed puts the consumer back in."