Competition regulator must oppose iiNet/TPG merger

The proposed merger of two of Australia's last remaining independent Internet Service Providers will have a sharply negative impact on the level of competition in Australia's broadband market and must be opposed by the Australian Competition and Consumer Commission.

"I will be reminding the ACCC of its obligation to directly prohibit acquisitions which would be likely to have the effect of "substantially lessening competition in any market," Australian Greens Communications spokesman Senator Scott Ludlam said this morning.

The deregulation of Australia's telecommunications market in the 1990's created strong outcomes for competition as many new entrants to the market introduced innovative products and deployed new fixed and mobile broadband infrastructure.

However, over the past few years, the trend towards increased competition in the sector has reversed, as massive consolidation has seen dozens of market innovators snapped up and their products standardised.

The proposed merger announced this morning of two of the last remaining independent ISPs, iiNet and TPG, will do much to destroy what little differentiation is left in the broadband market.

As Australia's third and fourth-largest broadband players, iiNet and TPG currently compete strongly for broadband consumers in every geographic market in Australia, with offerings that are substantially different from those of the largest players, Telstra and Optus. A merger of the two companies would leave Australians with markedly reduced broadband choice.

"Competition in Australia's broadband sector has been painstakingly built up over a period of more than two decades. The ACCC must not sit by and let the sector descend into a feeding frenzy that leaves consumers with no real choice between services," Senator Ludlam said.