"Gains in the telecommunications industry to date have been remarkable, and to consumers' benefit," Commerce Commission Chairman Dr Alan Bollard said in a speech to the Telecommunications Users Association of New Zealand (TUANZ) annual general meeting in Wellington today.

"We have also seen strong and improving profitability of industry participants. It has not escaped the Commission's notice that Telecom and some other parties have been making very strong returns. The conclusion we draw from this is a belief that consumers can expect to receive even more benefits in the future as competition intensifies."

Studies comparing New Zealand and Australia, assessing New Zealand's deregulation and by the United States Federal Communications Commission have found consumer prices have decreased rapidly in New Zealand, productivity has increased and existing law protects and promotes competition in this industry.

Dr Bollard said that many of the obstacles to competition present in 1992 have been overcome, including the principle issue of interconnection

The outstanding issue of number portability is being addressed by a Ministry of Commerce chaired advisory group, of which TUANZ and all major telecommunication companies are members.

"I should make it clear that the Commission is not in the habit of interfering with the processes of expert committees that are attempting to resolve issues, or in becoming involved in bilateral commercial negotiations," Dr Bollard said.

"However, the Commission is as keen as the Ministry to see number portability in the shortest practicable timeframe, and if it finds evidence of unreasonable delays being imposed on the process by any party, in such a way as to raise Commerce Act issues, it will consider action."

The Commission is always interested in allegations of breaches of the Act, but allegations made without back-up information being provided are not in themselves sufficient for the Commission to unleash a full investigation.

An example of this is recent request that the Commission investigate bundling of services by Telecom. The Commission investigated this in 1993 and found insufficient evidence to determine that Telecom may have breached the Act.

While allegations have been made, no further evidence has been given to the Commission.

At other times, complainants have made allegations about a competitor, but then failed to give the Commission information that it had requested.

"The Commission is of the view that, where complainants are uncooperative, this damages the chances of the investigation being successfully concluded," Dr Bollard said.

Under the Fair Trading Act, the Commission has taken 77 enforcement actions against telecommunications companies. The Fair Trading Act is the part of New Zealand's competition law which protects the accuracy of information provided to customers.

Under the Commerce Act, telecommunications has raised issues that other industries have not, or have not raised so dramatically.

In telecommunications, deregulation was more widespread, fewer controls were imposed on the incumbent, Telecom, common carrier agreements were not imposed at the outset and the disclosure regime is not as extensive as that for the electricity industry - the information disclosed by Telecom has not generally proved particularly useful for the Commission's purposes.

"These factors have certainly caused the Commission concerns over the years," Dr Bollard said. But despite these concerns, we believe that the industry has made huge gains since deregulation, not least in terms of its competitiveness. I believe that when people look dispassionately at this period, they will see that the gains that have been made have been remarkable."

Copies of Dr Bollard's speech are available from the Commission.

Media contact:Communications Officer Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432