Legality of telco move questioned

Stephen Gale
Stephen Gale
Just months after reportedly intending to reapply for his role as telecommunications commissioner, Ross Patterson was dumped from the position and replaced by Stephen Gale an associate member of the Commerce Commission.

Labour communications spokeswoman Clare Curran said the Government's decision not to reappoint Dr Patterson may be illegal and an embarrassment for the Government.

"The Government had clearly signalled it wanted to get rid of Dr Patterson who has maintained a strong independent role as the watchdog for the important telco industry.

"It is my understanding that the appointment of his successor Stephen Gale may have breached public sector requirements, specifically around the appointment process and the description of the appointment."

Clare Curran
Clare Curran
Ms Curran yesterday requested the Auditor-general investigate the appointment.

The request again puts Ms Curran directly in the path of Communications and Information Technology Minister Amy Adams. The two have exchanged pointed tweets on Twitter about alleged misunderstandings each claim the other has about the telecommunications industry.

Ms Adams said an independent panel was convened to consider the 44 applications for the role of Telecommunications commissioner and recommended the appointment of Dr Gale.

"The telecommunications commissioner's role remains a vital one to the success of the industry and it was important we found the best candidate."

Dr Gale impressed the panel with his wide range of experience in regulated industries and his ability to articulate the role of the regulator to promote the interests of consumers through encouraging competition and ensuring that investors had the incentives to invest over the long term, Ms Adams said.

However, Ms Curran was not appeased.

"It has been abundantly clear the Government has been looking for change. It is of major concern if the new direction taken by the telecommunications commissioner is to focus on the interests of investors, rather than consumers," she said.

The Government had an existing conflict of interest being an investor with its $1.35 billion commitment to ultra-fast broadband. It should be scrupulously careful to avoid accusations of protecting its own interests and reassuring the public that their interests were paramount, the Dunedin South MP said.

"When an important decision such as this is made by government, it has a statutory responsibility to ensure it has followed correct process and provided applications with appropriate information. This does not appear to have been the case with this appointment," Ms Curran said.

The appointment is seen as being more in line with the cautious approach being taken by Ms Adams to regulating broadband content, which she previously said may stifle innovation.

Dr Patterson was seeking another five-year term, having overseen the operational and structural split of Telecom and cheaper charges for mobile termination rates.

The one thing both Ms Curran and Ms Adams did agree on was thanking Dr Patterson for his contribution to the role.

The Economic Development Ministry in March advertised the position, which it said would usually be for up to five years.

The job is one of the highest paying in the public service.

Dr Patterson joined the commission on a salary of $370,000, saying he had taken a more than 50% pay cut from his previous role as a lawyer at Sydney law firm Minter Ellison.


At a glance
Stephen Gale was an associate member of the Commerce Commission. He was previously a director of the advisory firm Castalia. He was with the New Zealand Institute of Economic Research from 1986 to 2003 and was with the Ministry of Energy before that. He holds a doctorate in physics from Cambridge University. During his working life, Dr Gale has specialised in energy policy, regulation and, in the past 15 years, competition policy.

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