Wednesday, September 28, 2011

Josh Gans sets the challenge

Joshua Gans seems very pleased that his whole interview with Alan Jones went to air.

He made a point that no submission to the ACCC has said "Gans and Hausman are idiots". That is true - my comments thus far have been reserved for my iTnews column titled When smart people say dumb things.

Meanwhile other submissions in the same proceedings are reported to claim that Telstra's separation proposals do not go far enough.

It is an unfortunate fact for Optus that there is such a thing as the public record. The fact that Telstra's structural separation is progressive over the life of the NBN deployment is not new; it is a consequence of the legislative prescription.

To the Senate committee inquiry into that Bill Optus submitted;

If implemented in its present form, Optus considers that the reform package will provide the foundation for stronger competition to emerge in the fixed line sector.

The Competitive Carriers Coalition was at least alert to the issue, but recognised the difficulty of concluding both a functional and structural separation. They submitted;

The CCC suggests that the ACCC be given guidance that any undertakings show how the management of Telstra’s wholesale business will be organized to remove incentives to iscriminate during the period of a staged separation, and to that the guidance detail certain minimum requirements.

However, the facts as I understand them is that the legislation was not so amended.

Meanwhile, I'm really looking forward to round 2 of Jones and Gans. Jones invited Gans to agree that the ACCC was an inadequate regulator as it hadn't acted on the Coles/Woolies duopoloy nor "shop-a-dockets". I suspect Gans' view here is closer to the ACCC than Jones - though I also wonder if anyone has explained the Metcash decision to Jones.

Note: I must admit to finding a certain irony to the joint submission by Professors Hausman and Gans. I had an "altercation" in a previous life with Hausman. He had written a submission for Optus on regulation of mobile terminating access. I commissioned Josh Gans to write a report on the Hausman submission.

Needless to say he did an excellent much so that Professor Hausman complained to my parent company about "friendly fire" as he had written a very similar report for them in New Zealand. And yes, the Commerce Commission did in the end use the report I commissioned from Josh Gans to critique my parent company's position.

The point is not so much that it is now strange to see the two writing a submission together as that matters of economics are, indeed, things on which even great minds can differ.

Novae Meridianae Demetae Dexter delenda est

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