Overseas Experience Shows Industry Regulator Has Cost Consumers

Telecommunications industry specific regulators as recommended by the Telecommunications Inquiry have not well worked overseas, and have in fact ended up costing consumers, National Communications spokesperson Lockwood Smith said today.

“The Government must carefully consider the recommendations of the Fletcher Inquiry. It must look to the telecommunications experience in other countries for a lead.

“Specific regulation for the telecommunications industry could curb innovation, create bureaucracy, and increase costs.

“In Germany, telecommunications regulation has been a growth industry. It employs more than 2,500 bureaucrats.

“That army of bureaucrats has reduced the cost of call charges for private households over the last 2 years by almost 20% - but that compares with a 37% cut in New Zealand.

“We’ve had almost double the reduction in prices to consumers without the cost of the army of bureaucrats.

“In Australia an Industry Regulator imposed administrative costs in excess of $110 million a year on the industry and even greater efficiency losses. It has been found to delay investment in new infrastructure.

“The Government must be certain we’re not falling into that trap before it risks going down that path,” Dr Smith said.

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