Brislen plans phone company Wall of Shame

New Tuanz boss Paul Brislen has deftly responded to Vodafone manoeuvring on mobile price regulation - by pushing the same argument he did while with his old employer.

Yesterday, Vodafone raised the fear that regulation of mobile termination rates (MTR, or the fees phone companies pay each other to connect calls or txts to each other’s networks) would result in a “a huge transfer of wealth from the mobile market into the fixed”.

For “fixed”, read Telecom – the company with the largest fixed line business.

Why should Joe Public care?

Because the fixed line operator could simply pocket most of the savings once MTR regulation kicks in (and rates are lowered), pocketing the savings interconnection feels for calls from mobiles to landlines - for the Commerce Commission can only regulate wholesale rates, not retail pricing.

Enter Mr Brislen.

In his former life as Vodafone corporate communications head, Mr Brislen used the telcos-pocketing-the-difference argument as an example of why MTR regulation should not go ahead – citing the real-life example of Telstra after a similar regulatory change across the Tasman. The Aussie banked most of the wholesale price cuts, leaving customers little better off at retail. 

Now, on the other side of the fence, Mr Brislen is continuing to push this so-called “pass-through” argument.

The twist is that he’s now acting as watchdog, looking to ensure that MTR savings are passed on directly to customers in the form of lower mobile call charges.

Wall of shame
“Our view is that the telcos should pass on at least 90% of the savings to customers,” the Tuanz boss told NBR last night.

“Those that don't will join our wall of shame.”

The format of the wall of shame had yet to be determined, Mr Brislen said.

But given Mr Brislen’s flair for Top Gear-style humour (on the side, he’s written for the local edition of the BBC show’s magazine) and media hoofing, it’s a prospect that phone companies may dread.

Though presumably some diplomatic skill would be required in the wall’s deployment, given that two of the protagonists, Telecom and 2degrees, are (non-voting) Tuanz members.

May recommend customers shop elsehere
"Pass-through is key to Tuanz," Mr Brislen continued. "We've lobbied long and hard on this matter and if we don't see the telcos passing it on we'll be happy to recommend to our members that they look elsewhere for service."

Tuanz will lobby for retail price controls, if necessary
The Tuanz boss added, "If the customers see no benefit from this round of regulation then we'll be forced to ask the Commerce Commission and the Minister to have a look at retail price controls for the sector. The telcos don't get to benefit at the expense of the customers. "

What te commission wants
Vodafone’s “wealth transfer” warning came on the back of its cross-submission on MTR, one of the final stages in the regulation process (there will also be a conference early June).

On December 23, the Commerce Commission put forward its proposed MTR cuts, which will be implemented later this year (Communication Minister Steven Joyce has already approved regulation; the debate now is over how much rates are cut, and how fast). 

The watchdog proposed lowering of termination rates for voice calls from today’s rate of around 14cpm (cents per minute) to 4.68cpm on April 1 and then on to 3.91cpm by April 1, 2015.

Termination rates for SMS messages would be lowered from around 10 cents a txt to zero under a scheme known as “bill and keep” (BAK).

What Vodafone wants
Yesterday, Vodafone proposed keeping a 1 cent termination charge on txt messages, citing a need to disuade txt spammers (an argument that Tuanz has some sympathy with). Vodafone General Manager of Public Policy Hayden Glass said France had to reverse a BAK regime because of problems caused by mobile spam.

Mr Glass wants to see the commission actively monitor whether fixed-to-mobile MTR cuts are passed through to customers.

Vodafone also proposed a more gentle glide path, or more gradual lowering MTR – specifically with fixed-to-mobile calls – finishing at a slightly higher level (5 cents per minute) in 2014. 

In its submission, 2degrees encouraged the commission to stick with its proposed, relative steep glide path.

Cuts on the way ... but maybe not for you
So: from April 1, will we see cheaper mobile calling rates?

That depends on how successful Mr Brislen, and others, are in campaigning for the phone companies to pass on the wholesale cuts to their retail plans.

But even so, it’s no done deal.

As the commission revealed its proposed rates, 2degrees boss Eric Hertz said it would be more a case of customers getting more minutes, txt and data for the same monthly fee, rather than the cost of the carrier’s monthly plans dropping.