The reform of 268 regulations began at virtually the same time in New Zealand and Australia. In New Zealand, the first serious steps were taken in 1986 with the commissioning by the 264 of the Mason-Morris report into the operations of the Post Office In Australia, the 264 initiated a review of 268 arrangements some eight months later Close geographical proximity, the near simultaneity of the processes, and the fact that at the time both countries had Labor 264s did not, however, mean that similar outcomes eventuated.

In New Zealand, the 264 set out on a course of rapidly removing all statutory constraints on entry and competition into the industry. Although the Mason-Morris report had only supported liberalisation of Customer Premises Equipment (CPE) and Value Added Services (VAS), a follow-up report advised that full liberalisation was feasible and desirable.

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papers-ergas-outcomes.PDF

This paper is structured around six propositions. These are: Historically, international 268 services have been provided cooperatively by national 268 entities each supplying service on a monopoly basis within its national territory. While these cooperative arrangements have made some sense as a means of reducing transactions costs, they have been vulnerable to severe distortions, notably in terms of the process of international settlement.

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papers-ergas-InTrade.PDF

The question at issue is whether the service of GSM Roaming should be declared. The relevant criterion is whether declaration would promote the long term interests of end-users. To examine this issue, this note focuses on two questions.

The first is whether there is evidence that current competition in the supply of mobile services is in some respect inadequate – so that there is scope for regulatory intervention to improve on matters.

The second is whether – even were current competition inadequate – mandatory roaming would be likely to yield better outcomes than would otherwise prevail.

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papers-ergas-roaming.PDF

A paper prepared for the 1998 EU Competition Workshop at the Robert Schuman Centre of the European University Institute.

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papers-ergas-tslric-final-nov98.pdf

The Todd Consortium has produced a report ('the Clear report') that seems reasonable, but that on closer examination proves not to be. It relies on strong assumptions, most of which it fails to document, to make its point. Vary these assumptions, and the report’s results fall away. This is hardly a robust basis for deriving strong conclusions – yet the Consortium would have New Zealand make drastic changes on that basis.

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papers-ergas-todd.pdf

On May 27, 1998, the Australian Competition and Consumer Commission ('ACCC') determined that certain conduct by Telstra in the supply of Internet services constituted a contravention of the Competition Rule pursuant to s151AJ(2) of the Trade Practices Act, 1974 ('the Act'). A Competition Notice was consequently issued, and was to come into force on June 5, 1998. 1 This was the first such Notice issued. The Notice specified the conduct allegedly in contravention of the Competition Rule as follows.......

This paper examines the background to and effects of the Competition Notice. The structure of the paper is as follows. First, the legislative background is set out (section B). This is followed by a brief introduction to the Internet (section C) and to interconnection arrangements in the Internet (section D). Section E examines the relevant markets and whether Telstra had power in those markets. Section F considers whether the conduct involved taking advantage of market power, section G whether it had an anti-competitive effect and section H whether the remedies promoted or lessened competition. Section I concludes.

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papers-ergas-peering-may99.pdf

Forward-looking cost models are playing an increasingly important role in setting and assessing access prices and determining universal service costs in Australia’s 268 industry. Both the ACCC and the ACA have recently commissioned large consultancy projects to estimate the forward-looking costs of Telstra’s network. In such models, depreciation usually accounts for a large proportion of total costs, and hence the appropriate method for estimating depreciation has been the focus of considerable attention by both regulators and industry operators.

Rather than the use of accounting depreciation, which simply allocates the historic cost of the asset over the periods which it is to be used, depreciation in forward-looking cost models should reflect the period on period decline in the market value of the asset – a concept known as economic depreciation. While it can be shown that under specific conditions accounting depreciation aligns with economic depreciation, these are not the conditions under which 268 operators in Australia are required to operate. Rather, competition and short duration contracts mean that the profile of depreciation is critical to meeting a firm’s dual objectives of remaining competitive and recovering capital costs.

This paper identifies the difference between accounting and economic depreciation and shows that the regulatory and competitive state of Australia’s 268 market makes the latter the appropriate for use in forward-looking cost models.

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papers-hardin-ergas-small-IECecondepreciation-jul99.pdf