October 31, 2012 9:00am by David Farrar

A little knowledge is a dangerous thing

The Commerce Commission has unconditionally approved Vodafone’s purchase of TelstraClear, a decision the Green Party says will reduce options and push up prices.

Co-leader Russel Norman noted the terms of the $840m takeover included a clause that would prevent Telstra re-entering the New Zealand market for an undisclosed period.

“Make no mistake – Vodafone’s move is about eliminating competition,” he said.

“We’ve seen it in the banking sector, the insurance sector, and now it’s happening in the telco sector. Vodafone’s takeover of TelstraClear will inevitably lead to higher prices for end-users, businesses, and government.

“It’s not in the long-term interests of the New Zealand economy for our primary competition regulator to be eliminating competition in the telecommunications industry.”

Oh Good God, now Russel wants to be the Commerce Commission also. Let politicians decide on the basis of a five minute chat to their staff, rather than you know months and months of legal and economic analysis.

However, the commission said it did not find any significant business overlap between Vodafone and TelstraClear in the provision of either mobile phone services or fixed line services to large businesses.

Exactly. It would be vastly different if it was a Telecom and Vodafone merger. That would be bad for consumers. But many in the industry think that the TelstraClear acquisition by Vodafone will actually enhance competition as it means there will be a fully fledged competitor to Telecom. Individually neither TC nor Vodafone could effectively compete with Telecom in all aspects. Together, they can.

With David Parker having declared that Ministers (not shareholders) should determine who can buy F&P shares, and Russel Norman declaring who can buy TelstraClear, it is becoming clear that in a future Labour-Green Government the way to get sales approved will be to cosy up to Ministers.