Telco challenge: Reduce regulation, increase certainty, protect competition

It was likely that unless there was change to Telstra, regulation of that company was likely to grow rather than decline, an ACCC Commissioner, Mr Ed Willett, told the Australian Financial Review's annual Telecom Summit in Sydney today.

"Since 1997, various measures have been adopted to strengthen the legislative access regime and to try to improve its effectiveness and address some of its limitations", he said.

"Most recently these measures have included: removing the possibility of merits review for arbitration determinations; and publishing indicative prices for Telstra’s copper access services (in addition to the introduction of the current enhanced accounting separation arrangements).

"This strengthening of the access regime is noteworthy as it is contrary to the expectations held when telecommunications competition regulation was introduced – that less rather than more regulation would be required over time.
 
"We need to turn this trend around. We need to find and implement measures that would not only protect and promote emerging competition but also reduce regulatory intervention and increase certainty.

"This is desirable not only from the point of view of industry and the community as a whole, but ultimately the unshackling of Telstra will best ensure maximum value to shareholders.

"The political and economic reality is that regulation will continue to constrain Telstra to the extent necessary and for so long as Telstra retains or strengthens its ability to leverage off its control of core infrastructure services to the detriment of competition and competitors in downstream markets.

"The choice is, it seems to me, between increasing regulation of Telstra or changes within Telstra to render its wholesale dealings more transparent, reliable and credible.

It was preferable that the latter be adopted, Mr Willett said.