Australian Financial Review – Page 3

ACCC Paying Lip-Service To Innovation

Australian Competition and Consumer Commission chairman Graeme Samuel now argues that content is the determining factor in whether a media company is being anti-competitive. (“Consumers the key to media revolution”, AFR, November 18).

Samuel says that the bar for monopoly has been substantially lowered. Now all it takes is an assessment that a company is acquiring too much premium content – sporting content, obviously, but movies as well. This judgement will continue to change as tastes do. He mentions tennis, AFL, rugby and cricket, but not soccer, which is now about as premium as you can get.

But it is the capacity for companies to make exclusive content deals that encourages entry into new, developing markets. If the ACCC punishes companies that it deems too enthusiastic in offering value to consumers, it will only make these consumers think twice about adopting the new technologies at all.

Why would the ACCC warn companies off experimenting with new products and services? Samuel may think that he is protecting competition, but by arbitrarily punishing companies he is punishing consumers and stifling innovation.

Such arguments as this betray the fact that the ACCC is merely paying lip-service to the possibilities of new media, rather than understanding its revolutionary consequences.

ACCC Should Be Good Sports

The chairman of the Australian Competition and Consumer Commission, Graeme Samuel, argues that if Telstra acquires the exclusive right to broadcast popular content on mobile phones then its competitors will be discouraged from investing in modern infrastructure. This is not the case.

By allowing service providers like Telstra the capacity to provide exclusive content to their customers, it encourages other networks to develop similar offers.

Optus already provides video news to their mobile customers.

Other phone and internet companies are contentedly building new infrastructure and developing new technologies to provide better, higher quality services to consumers. In the drive to attract more consumers, companies are forced to be more creative and more innovative.

Samuel argues that if Telstra is allowed to provide its customers with Australian Football League statistics and replays then this may cease. This is disingenuous at best.

To pick on one type of entertainment, popular though it may be, and then decide that it is suddenly a public good seems absurd. Exclusive sporting content is not the barrier to third-generation telecommunications competition that the ACCC thinks it is.

Leave sporting rights alone.

Nothing would encourage the competition that the ACCC is sworn to defend like letting the providers actually compete.

Telstra’s Regulatory Waltz

Allan Fels would like to increase the already innumerable regulations to which Telstra is held (“Fully privatised Telstra more of a bully”, Opinion, October 13).

Telstra is already responsible to its customers, its shareholders, the government, the Australian Competition and Consumer Commission and the Australian Communications Authority, not to mention self-regulation groups like the Australian Communications Industry Forum.

Every significant change in price structure is greeted with a barrage of competition notices and inquiries. If Telstra tries to offer discounted prepaid phone packages, they are condemned. If they try to harmonise their fixed line rentals with the new broadband market where many households are disconnecting their second line they are condemned.

Telstra is even condemned by the telecommunications industry ombudsman when their broadband customers voluntarily spend more money than expected.

The price war over broadband earlier this year is a case in point. Every attempt to offer Australian consumers cheaper and faster internet access is in spite of, not because of, the ACCC. No wonder the quality of our internet connections is so low compared to the rest of the world, when it must first sit through this regulatory waltz.

The last thing the industry needs is even more regulation. Already restricted by its universal service obligations and price controls, Telstra has less control over its own direction than does the ACCC. And in a time when broadband is becoming increasingly ubiquitous, the overly aggressive restrictions that Fels proposes will pre-empt a dynamic and competitive industry.