The framing paper for the Vertigan Review asked whether the ACCC should be responsible for the economic regulation of the telecommunications industry. It sparked less interest than the weighty topics more specific to the NBN. Many share the view of Patrick Fair, partner at law firm Baker & McKenzie, who believes that the ACCC has a lot of vested knowledge and there’s little need to change.
Ian Martin, telecommunications analyst at RBS Global Banking has a different view. He says in this week’s Crosstalk podcast that the ACCC’s errors calculating the risk of investment are largely responsible for the likely poor return on the NBN.
Stephen King, Professor of Economics at Monash University, also believes the role should move from the ACCC. He talks about the inherent conflict as a competition regulator who’s also involved in designing the structure of the industry – it is an umpire and a player.
So, where should the role sit? John Stanton, CEO of the Communications Alliance, says there’s scope for greater involvement from within the industry. That’s probably right, but it’s hard for a democratic organisation to make decisions on competition when it impacts members – Telstra, for example.
Stephen King suggests convergence of technologies means the role should move to ACMA. And Ian Martin reckons a specialist body would be better placed to deal with capital efficiency issues – perhaps one that covers other infrastructure intensive industries.
The outcome could be “all of the above”. Or no change at all. We’re yet to see the submission from the ACCC but their stance is likely to be, “if it’s not broken, why fix it?” That’s a fair point, if it’s not broken.