Generic competition law as a regulator

  • Paul Scott “Competition Law and Policy: Can a Generalist Law be an Effective Regulator?” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). One of the concerns the Privy Council and the United States Supreme Court has had with refusals to deal and essential facilities cases is that they essentially force the courts to become regulators.[123] The courts eschew doing so. Arguably the courts' reluctance to do so may have had the effect of reducing the effectiveness of section 36. The High Court in Bay of Plenty Electricity referred to this problem.[124] However, perhaps the concern is overblown. The objections to courts overseeing access are familiar. They do not like to do so. Cooke P noted in Telecom v Clear: "We are not a price-fixing authority".[125] As Judge Easterbrook has observed,[126] courts should not function as "little versions of the Office of Price Administration and assess the 'cost justification' for prices charged". Courts lack the expertise to do so because it requires an in-depth examination of all the costs of both incumbent and access seeker. It is hard for generalist courts to develop a price where there has been no previous dealing and so the courts would have to review access prices regularly.[127] As for New Zealand, the presence of lay members on the High Court removes the objection based on lack of expertise. Ironically, access based on the ECPR alleviates concerns as well.[128] It only requires the monopolists' costs to establish profit and input cost. Courts need similar information to evaluate predatory pricing claims.[129] No one claims this is too difficult.

Uncertainty and Regulation: Insights from Two Networks

  • Paul Scott and David De Joux “Uncertainty and Regulation: Insights From Two Network Industries” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). The effects of light-handed regulation and heavy state intervention on network industries are showcased in this paper that considers both the telecommunications and electricity sectors. The circular nature of regulatory changes that the telecommunications industry has had to endure is a feature of the paper which identifies the history of this industry, regulatory changes and their impact on uncertainty and investment. The social welfare obligations placed on both industries plus the Ultra Fast Broadband Initiative are also discussed because of their impacts on regulation effecting these industries. The paper concludes that experimenting with different regulatory regimes in these industries has not encouraged investment and has not improved regulatory certainty, by but increased uncertainty. Additionally the paper suggests that a fixed regulatory framework, that remains stable and unaffected by changes of government, is the most likely to benefit these two network industries long-term.

  • Alec Mladenovic “Networked Industries: Electricity and Telecommunications” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011). This paper discusses how the regulatory settings in both the electricity and telecommunications sectors have swung from one extreme to another in our recent past. The chapter suggests we should be asking what drove these significant changes in policy settings, and looking to understand the degree to which major regulatory changes are evidence based. He highlights the need for regular reviews to understand whether major regulatory changes have had the desired effects in the market, and suggests further analysis of the cost of major regulatory change would be helpful. The regulatory changes in these sectors have also challenged some sacred cows – the need for regulatory certainty and related stability and the integrity of property rights chief among them. The chapter suggests we take a hard look at whether we should be more explicit as to the relative importance of these considerations in our regulatory decision-making and identifies three key issues which will be the focus of future research: regulatory change and the effects of constant reviews of the regulatory regime; regulatory uncertainty; and the relationship between regulation and property rights in the electricity and telecommunications sector.

Public participation and electricity regulation

  • Mark Bennett and Joel Colón-Ríos “Public Participation in New Zealand’s Regulatory Context” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). This paper presents the reasons for and against more participation in regulatory processes in New Zealand. Public participation is often viewed with a degree of scepticism by some regulators however its existing and potential value is outlined clearly in this paper through examples including the electricity industry. The electricity sector example demonstrates the conclusions of the paper, including that governments and regulators should aim to increase the level of public participation that informs and influences their decisions and should do this in a way that avoids or mitigates the reasons against public participation particularly special interest capture, technocracy and apathy to regulatory decisions. The paper suggests mechanisms that could be used to increase participation including citizen’s juries, citizen advisory committees and consumer advocacy groups. Overall the paper outlines the benefits of public participation and gives a good basis as to why a more engaged and informed citizenry is desirable for regulation.

  • Mark Bennett and Joel Colón-Ríos “Public Participation in New Zealand’s Regulatory Context” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). In the course of research it has become clear that in other jurisdictions consumer (or "citizen-consumer")[46] advocacy groups – which may be seen as representing the public or the perspective of ordinary persons – are well-established mechanisms of participation, both in the ordinary political processes establishing the regulatory framework and in decisions within that framework. There is a question about whether such groups can be seen as a form of public participation at all, given that it is an organised interest group that is participating. As such groups accept, they lack the democratic legitimacy usually attributed to elected and representative institutions or entities.[47] However, we prefer the argument of Ayres and Braithwaite discussed in our Stage One chapter, according to which public interest/consumer advocacy groups have a role to play in representing the general public or consumer interest. We, therefore, can treat this as public participation – especially if there is evidence that these groups do consult with the public to form their account of the public interest.[48] Ayres and Braithwaite see "tripartism", the empowerment of public interest groups, as a way of preventing regulatory capture, through giving information and decision making power to public interest groups.[49]

  • See also Mark Bennett and Joel Colón-Ríos “Public Participation and Regulation” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011).