The Elusive Mirage: Competition Regulation and Telecommunications,1997–2000

Abstract

This paper looks at the operation of telecommunications-specific competition regulation pursuant to the 1997 legislation, on the eve of a review of the 1997 legislation by the Productivity Commission. The central thesis is that the ‘brave new world’ created by the 1997 legislation, of industry self-regulation of terms and conditions of access to declared telecommunications services, has been an inhospitable land for new entrants. Neither the access nor the competitive conduct provisions have operated in the way intended by the policy-makers and anticipated by new entrants at the time of introduction of the 1997 legislation. The tools of competitive conduct regulation at the retail level have proven cumbersome and susceptible to challenge. Instead of a rapid withering away of market power under threatened or actual market entry, the emergence of the Internet and commercial deployment of digital subscriber line (DSL) technologies has meant that Telstra's ability to cross-market leverage may actually have increased and extended beyond the telephony sphere. Finally, the paper identifies key issues for the Productivity Commission's review.