Harper review says ACCC telco functions need new regulator

Also takes aim at trade pacts and the 'Australia tax'

The federal government is considering a competition review that suggests ditching the current telco competition regulator in favour of a new body.

Key to the telecommunications reforms is the ACCC's more general role in regulating access to monopoly infrastructure, which also covers rail, ports and the like. In the telecommunications market, the most significant role of the regulator in access and pricing is to issue what's known as “declarations” covering monopoly products.

For example, service declarations are what require Telstra to make its copper infrastructure available to competitors in the broadband market (and regulate pricing). Other service declarations cover Telstra duct infrastructure, wholesale services, and mobile termination.

The Harper report produced by the government's Competition Policy Review Panel (chaired by Ian Harper) notes that there are a variety of regulatory agencies covering infrastructure access – in addition to the ACCC, there's the National Competition Council, the Australian Energy Regulator, as well as various state and territory regulators. All of these, the report suggests, should be aggregated into a single, new Access and Pricing Regulator.

The ACCC would retain its competition and consumer functions.

The response from ACCC chairman Rod Sims was muted. While welcoming the report, Sims said “the suggestion that access and pricing regulation be separated from the ACCC is a significant structural change”.

The tech sector will also be watching reaction to two other recommendations in the Harper report.

It suggests that Section 51(3) of the Competition and Consumer Act be repealed in full. This section exempts some aspects of intellectual property from laws covering restrictive trade practises, in effect allowing IP owners to indulge in anti-competitive behaviour using license conditions specific to Australia. The ACCC has long argued that Section 51(3) creates anti-competitive markets and should be scrapped, and other reviews (including the government's IT pricing study in 2013) have agreed.

The report states that all “commercial transactions involving IP rights, including the transfer and licensing of such rights” should be covered by the Competition and Consumer Act.

Governments' willingness to subject Australia to other countries' wishes in international trade agreements – for example, such as the Trans Pacific Partnership – gets a backhanded swipe from the report. Recommending the government undertake a broad review of Australia's IP framework, the report says the review “should also assess the principles and processes followed by the Australian Government when establishing negotiating mandates to incorporate intellectual property provisions in international trade agreements”.

Before signing off on the IP provisions in international trade pacts, the review says governments should conduct “an independent and transparent analysis of the costs and benefits to Australia of any proposed IP provisions”.

The Harper report also takes aim at laws that help international suppliers maintain the “Australia tax” via geographical price discrimination. It suggests Australia should repeal all remaining legislative restrictions on parallel imports. It brushes aside industry opposition based on concerns about counterfeit goods and warranties, saying such things can be addressed directly through “regulation and information”.

“The threat of parallel imports may also induce international suppliers to re-think their regional arrangements”, the report states.

Submissions to the draft report are open until November 17. ®

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