There is a case for the government making significant changes to the Australian Communications and Media Authority (ACMA), telcos have argued.
The government in June announced it would undertake a "root and branch" review of the ACMA.
The review, which is due to report before the end of the year, is considering whether any of the ACMA's current functions can be ended or performed by other agencies or industry.
Public submissions to the inquiry have now been made public.
In their submissions, Optus and Vodafone argued that the split between the ACMA's regulatory powers for the telco and media sector and the Australian Competition and Consumer Commission (ACCC) oversight of competition issues in the telco sector (except for media diversity restrictions) is suboptimal.
"It is VHA's view that a communications and media regulator must have the capacity to recognise when and how its decisions have implications for competition and the capability to undertake the economic analysis required to effectively address those issues in its decision making," Vodafone argued in its submission (PDF).
"This is because, even without any change, its current responsibilities include a range of areas that are critical to competition in the telecommunications and media sectors, for example,spectrum management and technical regulation."
"The current regulatory structure in Australiais somewhat unique internationally," Optus' submission (PDF) argued.
"It combines elements of an industry specific regulator (ACMA) with elements of an economy-wide competition regulator (ACCC). Whilst it could be argued that this approach draws from the best of both worlds, the opposite could equally apply...
"It is no longer clear that the present framework with its disjointed decision making provides for regulation which is consistent or has a clear over-arching objective. Optus considers there is a strong case to reform the current regulatory structures along the lines of a single industry specific regulator."
The telco pointed to the example Ofcom in the UK as a model of best practice for such a regulator.
Optus said the ACMA could be replaced by a new Ofcom-style regulator.
The UK's Communications Act 2003 charges Ofcom with maintaining "fair and effective competition". The organisation's remit includes TV and radio, fixed line and mobile telecoms, postal services and spectrum.
Ofcom and the US Federal Communications Commission (FCC) are "arguably the two most effective telecommunications and media regulators anywhere in the world," Vodafone said.
"They are known for their proactive management of their areas of responsibility, rigour of decision-making, transparency and accountability. Accordingly, the key question for the current review is: What drives these very different outcomes in regulators with, at least superficially, similar structures?We believe that an appropriate focus on competition matters and structured decision governance are the two most important factors to optimise regulatory performance."
Telstra rejected the idea of an Ofcom-style regulator.
"Moving economic regulatory functions into the ACMA would result in overlap and inefficiencies between the ACMA and the Australian Competition and Consumer Commission(ACCC), and create additional complexity and costs due to industry having to engagewith two regulators," the telco argued (PDF)
"There is already duplication between regulators in the area of customer protection and privacy, which adds to industry costs. Such duplication needs to be unwound, not exacerbated."
The full range of submissions are available from the Department of Communications website.