Fran O'Sullivan: Let's see a real inquiry into the Telecom leak

Crony capitalism. Two words that get to the heart of the billion-dollar Budget leak, but two words that will not feature in any inquiry into how Telecom got its mitts on the "commercially sensitive" Cabinet paper.

That paper spelled out the Government's intention to smash the telco's crippling stranglehold over this country's broadband development.

It's a bit like Powdergate, where six former dairy industry defendants facing charges laid by the Serious Fraud Office have now done plea deals that will ensure revelations that could damage this country's commercial reputation overseas are swept under the table.

Politicians on both sides of Parliament, except for National's former communications minister Maurice Williamson, are painfully aware of realities of doing battle with the largest listed company.

But their soul-searching over the real reasons behind the extreme length of time it has taken for this Government - in fact any government - to take on our telco giant is not likely to be played out in any inquiry, especially the select committee inquiry National leader Don Brash wants.

Instead it's been left to State Services Commissioner Mark Prebble, a former boss of Prime Minister Helen Clark's own department, to get one of his commissioners to make what on the surface looks to be a very rudimentary probe.

The commission's terms of reference for its inquiry are remarkably terse: investigate how Telecom came to possess classified information about the Government's telecommunications review and report to Clark and Minister for State Services Annette King on the outcome.

Clark says that Prebble expects to report to her within a month.

But quite why the commission needs so much time to pinpoint the leaker - when Telecom itself took just two days to reach "firm conclusions" on how the paper came into its hands - beggars belief.

If the source of the leak is obvious, he or she should be stood down now and not left to remove evidence that might show the extent of any prior collusion with Telecom or, for that matter, any other corporate that stands to get its commercial feathers clipped by Government regulation.

Or are Telecom's "firm conclusions", which, it has to be said, were not released until after the Prime Minister indulged in some sabre-rattling by implying the Government would split up its business, similar to its claim that it had destroyed all copies of the Cabinet paper?

Also at issue is whether Clark and Prebble are conniving to ensure that the inquiry's timing is orchestrated to ensure that any potentially embarrassing revelations come well after Finance Minister Michael Cullen reads his May 18 Budget, when the attack on Telecom's stranglehold over broadband was to have been announced.

This is a serious test for Prebble's credibility. He did not come off brilliantly himself in an inquiry which revealed the former head of the Prime Minister's department had held back a document relating to the Corngate episode before the 2002 election.

The opposition claimed the document proved Clark knew more about possible genetically modified corn contamination that she let on during the campaign.

If the commission is to retain broader public confidence, the very least Prebble should ensure is that the police are called in the moment the identity of the leaker is known and that they are asked to investigate whether the person is on the take.

If Prebble was of stout heart he would use his own powers as State Services Commissioner to widen the inquiry in the following way or suggest a public inquiry if the commission was not up to the job.

1. Investigate just how the nation's largest listed company was able to exert such a stranglehold over the Government at all levels that it took more than three years after the first recommendations emerged before the Cabinet dealt with its broadband monopoly.

a) Why did the Cabinet turn down a proposal put forward by previous communications minister Paul Swain that had been backed by the Ministry of Economic Development to crunch the broadband monopoly in 2004?

b) Was the billion-dollar leaker working for Telecom back then and was he or she part of a nexus of well-connected players paid from the telco's alleged $30 million Government relations budget?

2. Investigate whether Telecom boss Theresa Gattung and her high-priced consultants "spread confusion" in Telecommunications Commissioner Douglas Webb's mind that he could reverse his earlier decision to curtail Telecom's monopolistic position in late 2003 in favour of a proposal put forward by the telco which it blatantly undershot.

a) Gattung's embarrassing admission that telcos, including her own, deliberately spread confusion among their customers so they could hike prices is clearly a principle which has governed Telecom's commercial behaviour.

b) Is this appropriate and when will the Commerce Commission launch an investigation into how the company has hoodwinked its customers to date?

3. Investigate how Telecom "duchessed" leading business organisations to the extent that Gattung could get away with claiming that the broadband issue was a manufactured grievance driven by competitors and the news media.

a) Which business organisations does Telecom belong to and help fund?

b) How many business organisations canvassed their smaller members about their concerns before supporting Telecom's line that any move to break up its broadband monopoly was property theft?

c) How many businesses are silent on the matter because they are big enough to enjoy "sweetheart" Telecom deals?

4. Investigate the extent of Telecom's funding of political parties.

a) Which parties have been told the extent of funding is dependent on their understanding of telecommunications policy and failed to listen to other telcos' concerns because they were mindful of Telecom's position?

b) How many MPs hold Telecom shares through their trusts and are frequent guests of Telecom?

c) Why is United Future taking so long in giving approval for an inquiry by Parliament's commerce committee?

5. Investigate how many former Beehive advisers are paid lobbyists or consultants to Telecom.

a) Should there be legal changes to prevent former Beehive advisers, Cabinet ministers, or senior Government officials immediately capitalising on their insider status by selling their access when they leave Parliament?

6. Investigate how Gattung got telecommunication regulations eliminated from a transtasman probe into competition issues affecting both countries.

a) Why was the Productivity Commission unable to canvass this matter?

b) In whose interest is it that "self-interested" issues are kept off the agenda for debate at the Australia New Zealand Leadership Forum?

7. Investigate what provisions the Government had made to ensure its market-sensitive decision to axe Telecom's broadband monopoly was conveyed to the company in an orderly fashion to stop market disruption and insider trading.

a) Why was Communications Minister David Cunliffe's press secretary unable to spell out when the minister was to inform Labour's caucus about the move, when it was mentioned in the Cabinet paper?

8. Why did the Prime Minister need a visit to South Korea last year before she woke up to the fact that New Zealand's telecommunications environment was "country cousin status" and do something about it?

Answer: see all of the above.