Telecommunications 'watchdog' may be muzzled

By RICHARD BRADDELL

The Government's telecommunications inquiry is considering toning down its suggested powers for an electronic communications commissioner.

In its June report, the inquiry recommended that services such as interconnection could be "designated" for the commissioner to set terms and conditions.

But chairman Hugh Fletcher said yesterday that a lower level of designation might require a telecommunications provider to comply with some obligations, but the commissioner would not impose pricing principles or determine pricing.

The inquiry could also suggest enabling the commissioner to accept voluntary undertakings from service providers, at which point any designation proceedings could be suspended, Mr Fletcher said at the opening of oral submissions on the draft recommendations in its June report.

Kicking off the submissions, Telecom chief executive Theresa Gattung reiterated the company's line that the prevailing level of competition and prices, particularly when compared with other countries, and rapid growth in areas such as the internet did not justify the intrusive regulation anticipated in the inquiry's preliminary report.

But in subsequent discussion it became apparent that Telecom does anticipate some regulation, with Ms Gattung admitting that bottleneck services such as interconnection and cases of obvious market failure were expected to be areas for designation.

But whereas the inquiry is recommending a standalone regulator, Telecom wants the Commerce Commission to have the "backstop" power of designating services.

The company has previously labelled the proposed commissioner a "commissar" with the powers of judge, jury and executioner.

The inquiry members, Telecom, Telstra Saturn and Vodafone agree that every effort should be made to find industry solutions in an industry forum.

Only after that failed would the commissioner step in.