Consultation

 

Consultation is critically important whenever governments want to intervene in a business or market. Everyone involved needs to fully understand what's happening, why and what the outcomes will be. 

Take the Commerce Commission process for example. I describe it as “tediously transparent” because the Commission is scrupulously fair about its interactions with all parties. 

For any determination process there will be a formulaic approach to consultation. The Commission will release a discussion document, will ask for submissions, which are made public by default, put out a draft determination and hold a conference, accept cross submissions, ask follow up questions and then publish a final determination..

Submitters are encouraged to mark commercially sensitive passages as just that and they are redacted from the public documents, but generally speaking we all know exactly where we stand at all times.

The Government’s telco review failed to deliver any such transparency.

To begin with, the discussion document listed three options, all of which resulted in the same outcome - an increase in price for copper broadband. Secondly, no attempt was made to outline what the actual problem was or why regulation was needed to resolve it. Thirdly, the status quo was rejected out of hand again, with no reason given.

We’re told the government received economic advice on the matter but that wasn't made public at any stage. We’re told several government departments submitted on the discussion document, but we we still aren't allowed to see the advice. Submissions were only made available after TUANZ and others put in Official Information Requests and even now we are waiting for a number of documents which have been delayed by MBIE.

Worst of all, the outcome of the discussion document was pre-determined and that is, I believe, why CallPlus has made the decision to seek a judicial review of the process. This was little more than consultation theatre designed to keep us all busy without producing any unwelcome changes to the government’s desired outcome. 

We still don't know why Chorus didn't see this coming. CEO Mark Ratcliffe worked exclusively on the UFB contract for several months before Chorus was spun off from Telecom. Steven Joyce wrote the Act and gave Chorus clear notice that the move to cost-based pricing would involve a dramatic change to its revenue stream by giving the a three-year delay in the introduction of the new regime. You don't include a three-year moratorium on something you expect will have a minor impact. And quite what the market analysts were doing when analyzing the stock is anyone’s guess. 

We still don't know what the impact on Chorus’s revenue will actually be. The Coalition has asked Professor Jerry Bowman from the University of Auckland to work out the impact and he says there won't be one, but Chorus claims the company will all but go under if we all pay it $10 a month less. TUANZ welcomes the decision to independently review Chorus's books to see what is really going on and looks forward to that report being made public. 

This is exactly what the government should have done before launching the consultation round because we've now wasted six months talking about a problem that may not actually exist.