I’ve known Bruce Parkes for years. Straightshooter. Like him. Always knew where he came from. Believed Telecom should use it’s superior market position to slow competitors entry.
But with the High Court judgement quoted below showing how he illegally tilted the playing field in Telecom’s favour he can not be the principal policy advisor on a plan which abolishes regulatory oversight of Telecom’s broadband. It gives them a blank cheque to overcharge much of the country for a decade.
Even before the court decision the sector was revolting. This revelation means that there needs to be a quick expert inquiry into both the decision to favour Telecom and the process that resulted in a very unusual decision.
Because of the vested interests involved the expert(s) will have to come from offshore.
The judgement said interalia:-
The senior Telecom executive named by High Court judge Rodney Hansen in his judgment penalising the telco for historic breaches to Commerce Act, is now a senior civil servant with oversight of the government’s broadband investments.
Bruce Parkes is currently Deputy Secretary at the Ministry of Economic Development for the Energy and Communications Branch. Among his responsibilities, according to his profile on the MED website, are ICT policy and the Ultra Fast Broadband plan. “In conjunction with Crown Fibre Holdings, this group will continue to implement work on the ultra-fast broadband policy, with the immediate aim of settling initial negotiations with potential providers,” reads the profile.
In the High Court judgment released yesterday, Justice Hansen imposed a record $12 million fine on Telecom for a breach of the Commerce Act between 2001 and 2004. Telecom is appealing the case. In his judgment Hansen notes that Parkes was among senior company executives to have been involved in what was later found to be an anti-competitive practice:
“Telecom’s strategy was understood and approved at the highest level of management. Bruce Parkes, who headed Telecom’s Industry Services Unit, which was responsible for the development and sale of commercial products to other service providers, said in a memorandum to Ms Teresa Gattung, the then Chief Executive Officer of Telecom: “Our negotiations to date with carriers have been to treat them exactly like other large corporate customers … carriers such as Telstra are obviously competitors in the retail market for any services but for data they are actually primarily resellers of our retail data services … and as such are growing the market for our benefit and theirs.”
“Mr Stuart Goodin, Telecom’s Strategy and Pricing Manager, worked under Mr Parkes in developing CDPs. He acknowledged in evidence that Mr Parkes’ philosophy was that there would not be price competition between Telecom and other TSPs, only competition on service quality,” the judgment reads
Yesterday’s judgment followed a High Court ruling in October 2009 that Telecom unlawfully leveraged its market power to charge competitors disproportionately high prices for wholesale access to its network.
Justice Hansen said in the judgment that the exclusionary effects of Telecom’s conduct “were injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process.” He also noted that “[t]he breach was the result of a deliberate strategy, apparently sanctioned at the highest levels of Telecom, to price data tails at a level that would preclude price competition between Telecom and other [teleco service providers]”.