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ACCC takes broadsword to broadband debate

ACCC takes broadsword to broadband debate

THE NATION’S chief competition regulator is committed to maximising consumer choice and supporting the efficient use of infrastructure, despite heavy criticism from Telstra over the use of its…

THE NATION’S chief competition regulator is committed to maximising consumer choice and supporting the efficient use of infrastructure, despite heavy criticism from Telstra over the use of its broadband network.

Speaking at the Australian Broadcasting Summit 2007, Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel said mergers allowable under the new media laws represent new challenges for regulators, including the Australian Communications and Media Authority.

“The ACCC’s challenge during this evolution of the media market will be to promote competition and not allow incumbents to impede the development of competitive choices for consumers,” he said.

With the imminent arrival of digital radio, advancements in mobile systems and allocation of licences for two new digital television channels, Samuel said it was vital that customer choice be maximised.

“The ACCC is focussing on ensuring minimal roadblocks to efficient investment in new infrastructure that will open up channels of distribution,” he said.

And where investment in infrastructure becomes inefficient — as might occur with the expansion of the nation’s broadband capabilities — the ACCC will not shy away from making its presence felt in the market.

“Where it is economically inefficient to duplicate infrastructure, our job will be to ensure access is provided on reasonable terms to competitors and the owners of the infrastructure, thereby providing competitive choices to consumers,” Samuel said. “In other words, we’ll be trying to keep the pipes clear of blockages.”

Earlier in the month, Telstra’s managing director for communications and public policy, Phil Burgess told Lawyers Weekly that the ACCC is “trying to preserve a worn out, backward-looking, dysfunctional regulatory regime”.

Burgess attacked the regulator on the grounds that it was stunting investment and hindering the development of broadband infrastructure. He also criticised the Government’s willingness to allow Telstra’s competitors to utilise its network at the expense of its shareholders.

“What regulators ought to be doing is protecting the public interest and creating an environment that is conducive to wealth creation and they’re not protecting the public interest when they reduce choices to consumers,” Burgess said.

“They’re not protecting the public interest when they stunt investment. They’re not protecting the public interest when they pillage the back pockets of shareholders and take private money for public purposes without just compensation.”

The issue of Telstra’s infrastructure aside, Samuel hopes the increasing amount of content that can be delivered through broadband ‘pipes’ — including proposals to build fibre optic networks — will in itself be a catalyst for competition.

“The fact that more content can be delivered through these pipes and reach a growing number of consumers has significant implications for media proprietors,” he said. “Not only does it expand their possible business models, it may also make it easier for new players to enter the field.”

Broadband is fast becoming a political issue. Last week, the Federal Government unveiled a $162.5 million Australian Broadband Guarantee program to connect regional Australia’s ‘broadband black spots’ to the national network, as part of a $2 billion Communications Fund.

Samuel also spoke of the vigilance the ACCC will show in reviewing proposed mergers under the new media laws.

“Let me place the role of the ACCC in its proper regulatory perspective. When we observe potential anti-competitive arrangements or conduct about to or having taken place, or when we have before us a potential or proposed media merger, we will deal with these matters independently and objectively,” he said.

“This will occur after conducting rigorous analysis, with appropriate stakeholder and public consultation. Our decisions will be made on an informed basis and consistent with our responsibilities under the Trade Practices Act.”

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