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Market watchdog must look to close Digital Divide

The agricultural sector is on the cusp of its next revolution. The advancement of technology such as big data analytics, the Internet of Things, remote sensing and automation all signal the next era of innovation for a sector with a proven track record of keeping ahead of the game.

However, the majority of agricultural production takes place in regional, rural and remote Australia, areas which are inhibited by poor telecommunications. Connectivity is shaping up to be one of the real barriers to taking agriculture to the next level.

The Australian Competition and Consumer Commission (ACCC) is conducting a market study of the communications sector, with the aim of understanding the practices and dynamics of that industry. This is a commonplace activity by the ACCC, with other markets such as beef cattle and car retailing also subject to similar inquiries.

The motivation of the study was to identify whether the appropriate competition settings are in place given the rapid evolution of communications technology. On the whole this is sensible as an evolving sector brings to the surface new competition intricacies. However, the terms of reference of the study exclude consideration of the Productivity Commission’s current review of the Universal Service Obligation, as well as the ACCC’s concurrent inquiry into wholesale mobile roaming – both issues that will be of vital importance to consumers in regional, rural and remote areas. While at some level it would seem sensible to keep these processes discreet, it does raise the question whether it is a true market study if a segment of consumers is implicitly excluded.

This in no way suggests that this was deliberate on the ACCC’s part, but rather that this is symptomatic of what isolated telecommunications users continually face. By population, regional, rural and remote users represent a small proportion of the telecommunications market. However, the NFF is concerned that continuing to consider key issues through a range of inquiries and forums will not only lead to a patchwork approach to policy consideration, but will also result in a patchwork of outcomes that will continue to perpetuate the rural/urban divide in telecommunications. Just as telecommunications technology is evolving rapidly, so too is farming technology. The Service Charter of the ACCC states; “We promote competition and fair trading and regulate national infrastructure to make markets work for everyone.”

While current competition settings may be appropriate for the majority of the community, ethically they must be appropriate for the entire community. Otherwise, a tiered system of access and therefore a tiered system of consumer rights will continue to perpetuate.

In determining the outcomes of this study, it is imperative that the ACCC turn their mind to the need to create the appropriate competition settings that facilitate these desired policy outcomes. We acknowledge that the outcomes listed above are ambitious. However, they provide the key to unlocking a key area of the economy which can drive future growth and prosperity.

 

The NFF’s submission to the ACCC’s inquiry into Competition in Evolving Communications Markets can be found here.

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