Wednesday, 7 April 2010

Time for a Specialist Comms Regulator

With the ACCC increasing its staff ahead of NBN Co's ownership of the wholesale communications network, it is timely to consider a new, specialist communications regulator for Australia to tackle the issues of technological convergence which are largely being ignored in the detail of the NBN.

In 2001, the Productivity Commission found little evidence to suggest that a specialist regulator works any better than a generalist regulator. However, using a comparative approach at the industry level, researchers suggest that a specialist regulator generally produces better outcomes in the communications industry.

The current laws governing Australia's communications industries are outdated, and competition is better seen as occurring across all media communications industries rather than just '"telecoms" or "media".

The ACMA already has this mandate, but the regulator is really the ACCC's poor cousin when it comes to its impact on the communications sector.

Canada's policy and regulatory model provides an important example of how the Australian framework might function, with the ACMA or a similar body taking on the specialist role adopted by the Canadian Radio-television and Telecommunications Commission (CRTC). 
Already, NBN Co is creating a few challenges for the ACCC:
ACCC Commissioner Ed Willett: This is something of an uncommon process for the ACCC, [having to assess] an undertaking for a company which currently has no market power and no network. What rules should govern this new company to ensure a healthy competitive industry and positive outcomes for consumers are some of the questions we are grappling with.
Far be it for me to suggest that the ACCC cannot do its job, but comparison with other jurisdictions suggests that specialist regulators are not so focused on competition theory and are better able to take on a more active regulatory role in the industry. This is particularly important during interconnection negotiations which will no doubt take up a great deal of the regulators time and effort.

Why change to a specialist regulator? According to Roehrich & Armstrong (2002):
[A]n active regulator is more likely to produce an active negotiation [in interconnection arrangements].
At $43 billion, a little bit of the pie spent on a specialist regulator is surely a good investment. Why this issue never enters the debate over the NBN is certainly a reflection of the interests that are being protected, rather than a focus on the interests which should be being served.

Creative Commons License Except where indicated otherwise, Le Flâneur Politique by Michael de Percy is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Australia License. Based on a work at politicalscience.com.au. Background image ©Depositphotos.com/ @redshinestudio