Vodafone urges Government to curb watchdog

Vodafone has called on the Government to rein in the growing power of the Commerce Commission by enforcing a strict "merits review" of the regulatory watchdog.

The telco presented an oral submission on the Government's unbundling legislation - the Telecommunications Amendment Bill - yesterday to Parliament's finance and expenditure select committee.

The bill changed the status of the commission from an industry dispute resolution service to a significantly more powerful regulator, said Vodafone public policy manager Hayden Glass.

"It seems dangerous that there is no one in the whole process who checks to see if the work of the commission is correct."

Merits reviews were often conducted by High Courts and were standard in other countries, said Glass.

Also, the country's largest mobile provider wanted the ability to do commercial deals with its wholesale customers and not be bogged down by regulatory process.

It is proposing that all regulatory decisions expire after five years.

"Regulatory decisions should be rolled back once competition is strong enough to be self-sustaining."

The bill did not encourage operators to invest in competing infrastructure either, said Glass.

Unlike fixed operators, cellphone companies had to pay rent to local councils to put equipment by the side of the road.

Meanwhile TelstraClear - which also presented to the committee yesterday - labelled itself the "voice of reason" on the issue of regulation.

"We are not going to engage in any emotional criticism ... we have had the experience of good commercial outcomes with Telecom," said Telstra chief executive Allan Freeth.

"It's just absolutely essential to make this regime work and that Telecom has the incentives to invest."

The Commerce Commission should not be able to set the price of any commercial deals, said Freeth.

"Telecom should have the right to price and get the right rate of return for services it provides."

Freeth supported the legislation proposal that accounting separation of Telecom - the public disclosure of accounts - should be compulsory.

But he opposed separation of Telecom into two companies, with different chief executives - called structural separation.

"It will take too long to get there [regulation]. We are not convinced about the benefits of it. Although the regulation should include a backstop for structural separation, so people take it seriously."

Like other competitors, TelstraClear was disappointed with Telecom's lack of detail on its proposed operational model, Freeth said.

The committee heard the last of the planned submissions yesterday, but may schedule more hearings if it needs to. The legislation is expected to be finalised by the end of the year.


Legal steps

* The last of the submissions on the Government's unbundling legislation were presented yesterday to Parliament's finance and expenditure select committee.

* The committee will consider the bill before presenting its findings to Parliament.

* The legislation is expected to be finalised by the end of the year.