'Rogue regulator' accused of telling porkies

Stuart Corner
Wednesday, 09 May 2007 09:00

IT Policy - Regulation

Telstra's hired consultant, Henry Ergas, has accused ACCC chairman, Graeme Samuel (who Telstra has branded a rogue regulator) of painting a false picture of why Telstra abandoned its FTTN discussions with the ACCC last July.

Interviewed by Geraldine Doogue on ABC Radio National's "Saturday Extra" programme on 5 May, Samuel said: "...we've been in discussions with Telstra [over its FTTN plans] on and off since March last year. The discussions were suspended in July last year by Telstra, when I asked them, privately and publicly, to bring the issue out into the public arena. They knew that from the beginning of the discussions, that there was a point of time at which this all had to be brought out into the public arena because you can't do these things behind closed doors."

Later in the interview, he repeated this assertion saying: "...we haven't been talking to Telstra since about July, August last year. Telstra suspended its discussions then. when we asked that they put their proposals into the public arena they withdrew...The next round of discussions that has taken place with Telstra has actually not been with the ACCC at but it's been with the Minister and with her department…"

However according to economist Henry Ergas, that is not what happened. In a letter to the Australian Financial Review, he said: "I attended the meeting that ended those talks on Telstra's behalf. As was clear at that meeting the differences between Telstra and the ACCC had nothing to do with any ACCC request for public disclosure. Indeed the issue of public disclosure was not raised by the ACCC at that meeting and did not form part of the discussions."

According to Ergas, Telstra had said it would file a public undertaking with the ACCC detailing its proposal and "there was no difference of view between the ACCC and Telstra as regards public disclosure."

He claimed that: "the fundamental difference was over whether users in the cities should help cover the losses arising form providing services in country areas, and if so, by how much." He concluded by saying: "It is disappointing that Samuel has said otherwise, because all of this would be well known to him."

A spokeswoman for the ACCC declined to provide any response to Ergas' comments.

At the close of her interview with Samuel, Doogue said: "We will seek the views of [Telstra's group managing director regulatory and corporate affairs] Dr Phil Burgess for next Saturday morning." A Telstra spokesman confirmed that be would be interviewed saying "[he] looks forward to correcting the record."