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More Bureaucracy - and it won’t help customers

More Bureaucracy- and it won’t help telecommunications customers

Thursday 29th Jun 2000
Dr Muriel Newman
Media Release -- Economy

The draft report of the telecommunications inquiry recommendations for industry regulation, released today creates the office of “electronic communications commissioner” with wide powers to over-ride commercial agreements between parties in the telecommunications industry.

This is 20 years behind the rest of the world, according to ACT’s Communications Spokesman Dr Muriel Newman. “Other countries set up industry regulation agencies in the eighties, and are just now getting round to the view that New Zealand’s approach of generic competition law is the way to go,” she said.

“In the last decade, New Zealand has made dramatic progress in the area of telecommunications, embracing new technology and with a high degree of competition unfolding.”

“The report purports to favour the regulator acting as a ‘last resort’ in the event of protracted delay in reaching commercial agreement. However, the report opens the way for the regulator to override the commercial agreements entered into by parties, and make binding determinations.”

“There appears to be no good reason for this. The report cites the possibility that such commercial agreements might be not in the best interests of Telecom’s users. If this were the case, then surely the normal remedies under the Commerce Act would apply.”

“Indeed, even Telecom’s competitors, Saturn and Vodaphone, favoured the current regime of general regulation through the Commerce Act.. Vodaphone, in their submission stated: “…the New Zealand regime has much to show the world. Many of the key features of the current regime represent regulatory best practice….we are supportive of the use of generic competition law, the lack of industry specific and active regulatory structures.”

“The Inquiry’s draft report recommends changes to the “Kiwi Share” to include data transfer and requirements for Telecom to lift the percentage of lines capable of handling data transfer. New technologies are just around the corner. The Government is in the process of auctioning off third generation radio spectrum which will enable high speed data transfer via cellphone networks.”

“ACT believes there is a danger that the Inquiry’s proposals. It will merely perpetuate an old network, force Telecom to run it in an unprofitable manner, and allow others to use the old network on a highly regulated basis.”

“What the inquiry’s report suggests is that the Government should be stalling the introduction of new technologies and the resulting benefits to users, by perpetuating old networks. This will set telecommunications in New Zealand back by years. The Government could also be expected to lose value from the sale of its radio spectrum next month,” said Muriel Newman. ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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