The Telecommunications Commissioner

Computerworld reports:

 Labour ICT spokesperson Clare Curran will ask the Auditor General to investigate the appointment of Stephen Gale as telecommunications commissioner.

Gale’s appointment, announced today, confirms industry rumours that the incumbent Ross Patterson would not be re-appointed. 

First of all I want to say that I think Ross Patterson did a very good job as the Telecommunications Commissioner. If he had been re-appointed, I would have regarded that as a good thing. I think the determinations made by the Commission were generally the right ones, and helped promote competition.

Telecommunications is always a challenging regulatory area, for two reasons. The first is that inter-connection issues are huge. It doesn’t matter (for example) if you have VHS and Beta video recorders and tapes that are not compatible. However it does matter if you are unable to call a Vodafone mobile from a Telecom mobile (for example). Could you imagine the Internet if one could not e-mail people at another ISP?

The other issue, is that the “last mile” network tends to almost always be a monopoly as it is not economically efficient to have multiple sewerage pipes, multiple electricity lines, multiple phone lines etc into every residence.

So the Commission has to balance up competition, investment, consumers and providers. It is not an easy job, and as I said I thought Ross Patterson did a good job.

I look forward to Dr Gale hopefully also performing so well.

I want to deal with some myths around the appointment though. The first is that Patterson was not re-appointed at the behest of Sky TV. I don’t know who invented this fantasy, but it simply is not true. I happened to be talking to some Sky TV people a few weeks ago, and I asked them about this. They told me that Sky TV had never expressed a view on who the Telco Commissioner should be to anyone in Government, or at all. The Official Information Act would disclose any communications – there has been none.

As it happens, the appointment of Dr Gale was recommended by an independent panel consisting of Brent Layton (chair of the panel), chairperson of the Electricity Authority, Liz Sinclair, deputy commissioner at the State Services Commission and Mark Steel, deputy secretary of the Ministry of Business, Innovation and Employment’s economic development branch. There were 44 applicants for the role, and they recommended Dr Gale. I think it is unfair to those three officials, plus Dr Gale, to push conspiracy theories with no evidental basis about his appointment.

As I said, I would have been very happy for Patterson to be re-appointed. But I don’t think there is some sinister conspiracy involving Sky TV around him not being re-appointed.  It is possible that his 10 month absence from the job for an alcohol-related illness was a factor – I heard there was a run in with the then Commerce Commission Chair, which won’t have helped.

Labour ICT spokesperson Clare Curran will ask the Auditor General to investigate the appointment of Stephen Gale as telecommunications commissioner.

Curran claims that a “new direction taken by the telecommunications commissioner role is to focus on the interests of investors, rather than consumers.”

In today’s announcement, ICT Minister Amy Adams specifically mentioned investors while congratulating Gale on his appointment. “Dr Gale impressed the panel with his wide range of experience in regulated industries and his ability to articulate the role of the regulator to promote the interests of consumers through encouraging competition and ensuring that investors have the incentives to invest over the long-term,” she wrote.

It is simply incorrect to say the Minister’s press release represents a new focus on investors over consumers. The Minister is simply quoting from the Telecommunications Act 2001 that Labour passed. S18 says:

(1) The purpose of this Part and Schedules 1 to 3 is to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services within New Zealand by regulating, and providing for the regulation of, the supply of certain telecommunications services between service providers.

(2)In determining whether or not, or the extent to which, any act or omission will result, or will be likely to result, in competition in telecommunications markets for the long-term benefit of end-users of telecommunications services within New Zealand, the efficiencies that will result, or will be likely to result, from that act or omission must be considered.