Non-Telstra telcos reject changes

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James Riley

A coalition of telcos and consumer groups has come together to publicly oppose Federal moves to scrap “one of the longstanding cornerstone protections” in the telecommunications industry.

The government is pushing to remove specific protections in Part XIB of the act relating to telecommunications, which give the ACCC power to issue legally enforceable competition notices, and replace these with an effects test.

Communications Minister Mitch Fifield said the effects-test would make telco-specific rules unnecessary and these reforms would “streamline regulation”.

“The government is confident that broader competition law will be effective in preventing anti-competitive conduct in the telecommunications sector,” Mr Fifield said in November last year.

“The telecommunications sector has changed significantly in the past 20 years and competition is much further advanced than it was at that time.”

Proposed amendments to the Competition and Consumer Act 2010 would give large telcos the ability to game the system and engage in illegal anti-competition activities, Macquarie Telecom group senior manager of industry and policy David Forman said.

If these powers are scrapped and replaced by an effects test, it would take years to hold a big telco to account and change their behaviour, Mr Forman said.

“Just because you’re introducing an effects test for all of industry doesn’t mean you don’t need all of XIB for telcos,” Mr Forman told

“This would expose us to the situation where Telstra could still roll the dice and behave in a way that may be in breach. Even if the ACCC do decide to take on a telco matter, they’d have a four year head start.”

The joint statements comes from Macquarie Telcom Group, COSBOA, Vodafone, Optus and the MNF Group, and calls on Parliament to reject these proposed amendments.

The bill is currently before the Senate Standing Committee on Economics, which is due to report back on Thursday.

The amendments are premature and leave much of the industry at risk, Vodafone chief strategy officer Dan Lloyd said.

“We’re concerned by the proposal to repeal one of the longstanding cornerstone protections of competition in the telco sector in such a rush,” Mr Lloyd said.

“This is a clear case of putting the cart before several horses.”

Without the power to issue telco competition notices it will be easier for telcos to engage in anti-competitive behaviour, Mr Forman said.

“We think there’s a real risk we’ll wind up with Telstra having an incentive to just game these new laws and see how far they can get, to see how far they can push the envelope to their own advantage by behaving in ways they might not have done under the risk of the XIB structure,” he said.

When contacted for a response, a spokesperson for the Communications Minister largely echoed the comments made by Mr Fifield last year, adding that the ACCC now supports the changes.

The ACCC has only issue a competition notice five times since 1998, with the most recent being to Telstra in 2006 over a wholesale price rise for ADSL products.

But the mere existence of the power, and the opening of an investigation, still had a strong impact, Mr Forman said.

“Just because they haven’t issued company notices doesn’t mean these investigations leading up to them making a decision haven’t had an effect,” he said.

“It’s a really, really important provision that’s used regularly, even though competition notices haven’t been issued, it still has an effect of lubricating commercial conduct in the market all the time.”

With the government standing by the proposed reforms, the group of telcos and consumers have now gone public, and will continue lobbying efforts.

“We’ve had a lot of support from the people we’ve spoken to, and no other telco has been in favour of it,” Mr Forman said.

“The reason for us going public is to demonstrate to the government that there’s a real, legitimate and widely held concern about this.”

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