Balanced, necessary telecommunications regulation: ACCC

The Australian Competition and Consumer Commission will continue to regulate telecommunications only where necessary, in a balanced and considered way, ACCC Commissioner, Mr Ed Willett*, said today.

"Ultimately, by promoting competition, and efficient investment and use of infrastructure, the benefits of broadband services can be realised and sustained over many years to come".

"Australia was not badly placed when compared to other OECD countries in terms of broadband technologies", Mr Willett said.

"It is important to note that faster broadband speeds and service offerings are possible because of the competition that has been stimulated by regulatory intervention such as unbundling the local loop.

"In some cases there has also been direct government intervention (such as subsidies and loans). This assistance can and should be provided to enhance the competitive environment, rather than diminish it".

"Australia is relatively more heavily reliant on DSL technology, largely because use of cable is lower, which in turn is probably due to the lack of cable on copper competition in Australia compared to other developed countries.

"The ACCC's regulatory role is to strike a balance between ensuring that investors who took a risk were not discouraged from undertaking new, efficient investment and, also to ensure that consumers received the benefits of competition.

"We've long recognised that the essence of competition in this country in telecommunications is to encourage competitors to build their own facilities rather than simply acquiring wholesale access from incumbents who have already made the investment and then reselling it to consumers", Mr Willett said. "Where it is economically viable to do so, competition and the benefits of it, is more sustainable in the long term. We call that efficient facilities based competition.

"This has been a consistent regulatory theme of the ACCC for some years; and deliberately so. All market participants need certainty to enable confidence for investment. In network industries where access regulation typically has a critical influence on investment, competition and growth, two things are important:

• first, that the regulator clearly articulates its broad regulatory strategy: that is, the things that it regards as important in applying the Act, and
• second, that the regulator adheres to that strategy over the medium to long term, making adjustments as needed to adapt the strategy to changes in technology and the market environment".

Mr Willett said 'flavour of the month' regulation damages certainty.

"Most important of all, adjustments in regulatory settings have to be subject to rigorous scrutiny and due process. The ACCC is not going to compromise sound regulatory practices or its statutory duty at the behest of any party".

Background

*Mr Willett was addressing the Broadbanding Regional Australia 2006 conference in Sydney.