Friday, March 14, 2008

That Commerce Bill

Yesterday I reported that the government had introduced a new Commerce Amendment Bill which was aimed at regulating Auckland International Airport. The bill is now online, and it seems that that is just a small part of it. The bill is the product of a long review process into the operation of the Commerce Act and its application to electricity lines and gas network companies; it substantially rewrites the general rules around price controls to specify the purpose of regulation (to benefit consumers and provide incentives to monopolies similar to those they would have in a competitive market), formalise the decision-making process and provide options on how controlled industries may be regulated. One of the aims seems to be to push the Commerce Commission towards more negotiated settlements where monopolies voluntarily accept regulation to avoid something worse, which should make things easier.

Airports feature briefly; they are already subject to some information reporting under the Airport Authorities Act 1966, and this regime is tightened and moved to the Commerce Commission, who are better placed to deal with any market abuse. Again, it's a good move - airports are natural monopolies, and we need to keep an eye on them. And it may just discourage stupid "investors", foreign or otherwise, who think they can buy up such assets solely to exploit that monopoly position.