Telstra urges convergence regulatory restraint

Submission on Terms of Reference for the Government's Convergence Review calls for regulatory forbearance and the promotion of investment in convergent industries

Telstra (ASX:TLS) has urged the Federal Government to show regulatory restraint as it progresses into the early stages of rewriting the rules governing media and communications to reflect an increasingly online-dominated world.

In its submission to the Government’s call for industry feedback on its Convergence Review draft Terms of Reference, Telstra executive director, Public Policy and Communications, Jane van Beelen, wrote any rewriting of the regulatory frameworks around convergence required the recognition of the need for regulatory forbearance and the promotion of investment in convergent industries.

“The Government recognises as a general principle that all regulation runs the risk of reducing productivity both directly, by imposing compliance costs on business, and indirectly by creating perverse incentives for management,” van Beelan wrote.

“However, policy makers should be particularly vigilant about the risks of creating an unnecessary regulatory burden in the context convergent industries.”

Van Beelan said the combination of rapid change and high uncertainty in convergent industries dramatically increased the risk of regulation creating unintended and undesirable outcomes.

“As technologies and business models in convergent industries are continuously adopted, modified and abandoned in nascent convergent markets, regulatory interventions targeted at often transient market outcomes can easily become outdated and redundant,” the submission reads.

As such, the telco is advocating that policy intervention be confined to “identifiable, significant and persistent market failure to achieve desired national outcomes.”

According to the submission, formal recognition and promotion of industry investment was also required to fully realise the potential of convergence. Government investment in fixed access, via the National Broadband Network (NBN), would by itself also not be enough.

”For instance, in response to burgeoning consumer demand, major infrastructure investments will be required to increase the data carrying capacity of Australia’s mobile networks,” the submission reads.

“Content providers will similarly need to make continuing investments not only in the production of digital content, but also in the technical and commercial frameworks required for its distribution.”

The company is also pushing for the Convergence Review to exclude investigating the appropriate process by which to manage spectrum allocation and instead have them dealt with through existing processes.

“In Telstra’s view, spectrum policy is a complex, technical area of regulation that warrants dedicated, specialist policy attention,” the submission reads. “…The Convergence Review should not interfere with or otherwise delay spectrum license renewal and allocation processes that are already underway.

“…Telstra emphasises it is critical that the Government and the ACMA [Australian Communication and Media Authority] make decisions about the renewal of spectrum licenses as soon as possible in order to ensure investment certainty and continuity of supply of mobile services.”

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Tags TelstraNational Broadband Network (NBN)Australian Communications and Media Authority (ACMA)ASX:TLS

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