Former ACCC Chairman on the NBN, Telstra

Graeme Samuel served with distinction as chairman of the Australian Competition and Consumer Commission (ACCC) from 2003 until 2011, a turbulent time in for Australia’s telecommunications industry.

His position often brought him into direct conflict with Telstra (especially under Sol Trujillo when the nation’s premier telco was at its most combative). He was also an instrumental player in the development of the NBN, including the aborted tender process that eventually gave way to the full-fibre model developed by the previous government and the structural separation of Telstra that this entailed.

Yesterday Samuel delivered the annual Charles Todd Oration in Sydney (which was streamed live to Melbourne). His wide-ranging speech touched on many aspects of regulation in the telecommunications industry, most importantly:

  1. He rejected Optus CEO Paul Sullivan’s call for further regulatory constriction on Telstra. Although Samuel’s run-ins with Telstra were notorious (particularly the ever-reasonable Phil Burgess), he insisted that Telstra’s wings have already been sufficiently clipped.
  2. Relating to this, he believes that the real issues to come won’t be infrastructure monopolies but content monopolies, as the big players strive to hoover up existing content, thus strengthening their bundled offerings. He feels that Telstra is in a particularly strong position here, because of its stake in Foxtel. However, Samuel is unsure precisely what role the ACCC can play here.
  3. Free-to-air television networks enjoy a ‘high level of protection’ under current regulation, including anti-siphoning laws that mandate certain content (such as live sports) cannot be exclusively delivered by Pay-TV providers. He implied that this inherently anti-competitive practice has curtailed innovation.
  4. Samuel – in agreement with the Vertigan Panel Review – believes that telecommunications regulation should be removed from the ACCC’s purview. Although the ACCC would continue to enforce competition laws, he advocated creating an ‘essential services commission’. This would combine the power all utility regulators into a single body, which would work on ‘analytical issues, mainly focussed around the pricing and conditions of access to monopoly and quasi-monopoly services.’ It would thus include aspects of both the ACCC and the ACMA, as well as energy regulators.
  5. Although he agrees with some aspects of the Vertigan Review, there are other parts he believes are misleading.  Overall he was critical of the current government's obsession with NBN reviews, which he felt were ‘politically tarnished’ and were proving detrimental to progress. The Scales report was singled out as being particularly bad: not only ‘factually wrong’ but ‘insulting and offensive’.
  6. Samuel doesn’t consider TPG’s rollout of FttB services to high-value customers to constitute a serious threat to NBN Co, contrary to the anguished cires of Bill Morrow and Ziggy Switkowski that this will propel us down a slippery slope.
  7. He felt that the TPG situation was the result of the hidden cross-subsidy conditions governing NBN pricing. In other words, prices are artificially high in urban areas to subsidise regional access, which allows smaller players such as TPG to swoop and undercut with cheaper infrastructure.