Is Telecom waiting for a National win?

Helen Twose spotted Telecommunication Commissioner Douglas Webb's submission about a week ago and wrote a good summary of it in the Herald - good on her, but I wish the ComCom and other government departments would pull finger and implement RSS or ATOM feeds so that we don't have to load the websites over and over again to check for updated content on important issues. It's not hard! Seriously.

In his submission, Webb takes a verbal chainsaw to Telecom's last-minute proposal to structurally separate; that is, to sell off the distribution network. Now this idea at first looked like it had merit, and in parts it does. However, on reading the finer points in Telecom's proposal, it became clear to Webb and industry players like BT (which has also submitted to the MED) that what the incumbent suggested was in its own words, "unworkable".

Webb says the proposal shields Telecom from regulatory scrutiny, makes promises hard to monitor, and could lead to higher prices for end-users. In other words, it runs counter to all that the new regulation is trying to set right.

Right from the start, Communications Minister David Cunliffe said:

The Telecommunications Act allows Telecom to offer a structurally separate solution, provided that it is consistent with existing obligations such as the TSO and complies with other separation requirements in the act, but does not permit the Minister of Communications to compel one. However, the model Telecom has proposed does not fit within the act in its current form.

If that's the case, Telecom must have known about it. Telecom has the lawyers and the regulatory experts to tell it how to proceed, so why would it put forward a proposal that has a snowball's chance in hell to get through?

The answer to that could be National, which looks set to win the next election. Despite having voted with Labour and other parties apart from the two-member ACT, how committed is National to seeing the new regulation implemented? Looking at the record of the past two National governments, and Maurice Williamson as the minister in charge of that field, not very.

There is every chance that Telecom will now stall the regulation - as it's "unworkable" - until the next election next year. It's easy enough, by obfuscating matters on a technical level. Many of the provisions in the new legislation that would've given the government and regulator real powers to hurry things up were removed at the Select Committee stage, such as the mandate to enforce structural separation if Telecom didn't cooperate.

With National in charge, Telecom can then press for changes that'll mean Business As Usual with only cosmetic regulation, as in the past.

Recovering from such a flip-flop would take a long, long time - we'd probably be looking at fifty years without effective regulation of Telecom. Remember, we haven't had any real regulation until what was introduced but not yet implemented by Cunliffe and Labour.

Update Maurice Williamson of National warns of "another round of gaming now coming" from Telecom (315kbyte MP3 file).


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