Between the lines: Range of gripes by telcos rings bell

An old maxim in journalism is that when people from different sides of an argument do not like a story, then it is probably right.

The principle has its limitations. But it might be of comfort to the Government's telecommunications inquiry, given the diversity of opposing views about its draft recommendations.

These views tend to reflect market positions and strategies of respective industry players.

Ranked from the dry to interventionist wet, Vodafone is displeased, Telecom partially displeased, Telstra Saturn mostly pleased and Clear Communications pleased and not pleased.

Telecom hates the idea of an industry regulator, but must be relieved that the inquiry did not go so far as to recommend unbundling of the local loop.

Clear, on the other hand, wants the regulator, but continues to lobby hard for local loop unbundling, arguing that if other industry players can attach their own facilities directly to Telecom's local network, that will hasten the deployment of "knowledge economy" type services while avoiding costly duplication of infrastructure.

Telstra Saturn's complaints are less fundamental. Since it is building a large network, it is pleased with the rejection of unbundling. But it wants more attention paid to number portability and believes the inquiry has been too soft on Telecom's street-by-street price matching when Saturn launched in Wellington.

Meanwhile, Vodafone likes the status quo and seems to hate just about everything about the inquiry. That should not be a surprise since its regulatory stance has been to behave like an incumbent since it arrived in New Zealand.

The strategy is an object lesson to competitors. Being pragmatic and having deep pockets, it has spent money and hit the market full-on. It now outsells Telecom, although it may be another year before it turns a profit on its $1 billion investment.

Hitherto unenthusiastic about competition law reform, Vodafone's lack of enthusiasm for intervention has been hardened by the inquiry's recommendation that customers of cellular new entrants be allowed to roam to incumbents' networks if possible.

To Vodafone, that is the cellular equivalent of local loop unbundling.

But whether that would discourage foreign investment in New Zealand, as chief executive John Rohan suggests, is another thing. Foreigners may well see the opportunity to piggy-back on Mr Rohan's network as a very good thing.

Another suggestion by Mr Rohan is that an industry body be set up to make binding decisions on industry issues.

But that would replace the consensus requirement that has crippled industry decision-making with a tyranny of the majority.

A more worrying criticism is that the regulator will inevitably seek to increase its powers. The inquiry's proposal contains safeguards: a public consultation process must be undertaken before regulation of services, and the Minister of Communications has the final say. Funnily, he has that now.