Poor old Graeme Samuel. In the latest salvo in its fevered campaign against government regulation, Telstra has turned its blow torch on the head of the Australian Competition and Consumer Commission describing him as an “unelected bureaucrat” (what an insult) who is jeopardising the (noble) attempt by Telstra to invest in a broadband network.

This follows reports, confirmed by Telstra, that it cut a deal on pricing with Communications Minister Senator Helen Coonan, but that Samuel stands in the way of its implementation. And so he should. As one of the correspondents on the broadband industry blog Whirlpool puts it:

When given the choice between an unelected regulator with specific scope to protect Australian consumers, and an unelected corporation with a history of manipulating markets to protect profit margins, I’ll take the regulator designed to protect Australian consumers.

Telstra is trying to preserve its artificially high profit margins — as you would expect it to do. Naturally it looks after its shareholders, but the job of the Government and the ACCC is to look after consumers first.

In an election year where both sides have everything to lose, an “unelected bureaucrat” is more likely to protect good policy and proper process than desperate politicians. That’s one of the reasons we have statutory authorities like the ACCC.

It’s easy to feel sorry for Coonan. She is under huge pressure. Labor’s bold broadband policy has hit her amidships, and has seized the public imagination despite being short on detail and suspect on costings. The Prime Minister is reportedly keen for her to come up with a rival plan, which can only mean a backflip on her previously tough attitude to Telstra.

Before we waste too much sympathy, though, it’s worth remembering, why the Government is in this fix. When it sold Telstra, there were plenty of warnings about the difficulties of allowing the privatised entity to be both a monopoly wholesaler and a retail business. Nothing was done to address these issues. Telstra was not forced to separate its two businesses, nor was serious consideration given to keeping the vital infrastructure in government hands.

Now, Telstra is intent on catapulting its monopoly advantage into the future, and in an election year both sides of politics are likely to cut deals. Labor is also suspect — it hasn’t spelt out what it will do with regulations to keep Telstra in check, other than talking vaguely about “review and relaxation”.

Meanwhile, those representing internet users believe believe a great deal can be achieved under the present regulatory settings. No good case has been made for junking them, despite Telstra’s constant campaign.

We should hope that Graeme Samuel hangs tough. If the Government — or Labor –give in to Telstra or overrule the ACCC on regulation it will set an appalling precedent, meaning that any big company prepared to conduct a slick and aggressive political campaign can, in an election year, bend public policy to its advantage.

Sometimes we should give thanks for unelected bureaucrats, and support them in doing their jobs.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey