Rivals join up to fight for competition

A decade of deregulation has failed to deliver sustainable competition in the telecommunications sector leaving a framework that could cripple Australia's ability to compete in a modern information economy. So said the founding members of the Competitive Carriers' Coalition (CCC), a pro-competition group established by AAPT, Hutchison, Macquarie Corporate, PowerTel and Primus Telecom.

The CCC was formed to better represent the interests of the non-dominant carriers and to encourage a strong competitive market that delivers investment, innovation and improved services at competitive prices, a group statement said..

The CCC will enable the non-dominant carriers to speak to governments and regulators with a single voice on issues central to the future of the communications sector.

Its most immediate concern is the proposed pay TV deal between Telstra, Foxtel and Optus, currently being considered by the ACCC.

"If the Telstra, Foxtel, Optus deal is allowed to proceed with no safeguards to protect competition, it will entrench Telstra as the gatekeeper of communication, information and entertainment services in the Australian market," the group said. The unprecedented level of potential service bundling that the Telstra, Foxtel, Optus deal enables will further strengthen Telstra's market dominance.

"Bundling can permit cross-subsidisation and can hide costs and pricing data behind bundled prices to anti-competitive effect. It could create a barrier entry for new capital investment by locking customers into a single aggregated service."

The CCC will be putting its views on the Telstra, Foxtel, Optus deal to regulators and the Federal Government and plans to work together to express common views on other key public policy issues in telecommunications.

The formation of the CCC follows widespread industry concern over the state of competition in the telecommunications sector. Representatives are Australian chief operating officer of the Telecom New Zealand Group, David Bedford; the chief executive officer of Macquarie Corporate, David Tudehope; the chief executive of Hutchison, Kevin Russell; the chief executive of PowerTel, Stephen Butler, and the managing director and chief operating officer of Primus Telecom, Greg Wilson.

The CCC believes the current regime alone is insufficient to achieve competition and gives rise to lengthy and costly arbitration which is not sustainable for many smaller carriers and which serves to entrench anti competitive behaviour.

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