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Samuel leaves 'stronger' ACCC behind him -

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ALI MOORE, PRESENTER: Come next Monday Australia's competition regulator will have a new boss;
economist Rod Sims taking the helm from Graeme Samuel, who's run the organisation for the past
eight years.

Initially criticised for being too close to business, Graeme Samuel says he leaves behind a
stronger ACCC with the criminalisation of cartel behaviour one of his biggest achievements.

But he also leaves challenges for his successor, not least keeping up with the rapid new
developments in technology affecting Australia's media and telecommunications landscape.

Graeme Samuel joins us now from our Canberra studio.

Graeme Samuel, welcome to the program.

GRAEME SAMUEL, CHAIRMAN, AUSTRALIAN COMPETITION & CONSUMER COMMISSION: Thanks, Ali.

ALI MOORE: You're leaving as boss of the ACCC just as there's a debate about media ownership in
this country. How competitive is the Australian media?

GRAEME SAMUEL: I don't think the debate's new. I think it's been there for some time, but it's
changing and it's changing because of technological change. We talked about this some five years
ago.

See, a little while ago we used to talk about the difference between radio, print - that is,
newspapers - and television - primarily free-to-air television - but of course we've now had the
Internet and we've got high speed broadband and higher speed broadband coming in one form or
another with the National Broadband Network, and that's opening up a vast array of platforms for
the distribution of audiovisual content to consumers.

Now, we're working, of course, at the ACCC on the basis that the pipe - that is the National
Broadband Network that will open up these platforms - is going to be open to access by all retail
service providers, Internet service providers - that have got in to distribute down that platform
to consumers.

But it brings you back to one fundamental issue, who owns the content? Who controls the compelling
sports content? Who controls the compelling movies and the compelling TV shows and the like? And in
the context of news, what's the most valuable commodity that you've got? It's the journalists.

ALI MOORE: So does that mean when Greens leader Bob Brown says that we need to look at the
concentration of media ownership in Australia, that's the wrong question? Does it mean that when
people point to News Limited, for example, having 70 per cent of the newspaper market in this
country, that's also the wrong question?

GRAEME SAMUEL: Well I'm not sure that we've actually identified any of the questions.

There's been talk about a media inquiry and I'd have to say to you that the ACCC is inquiring into
the media on a constant basis. We're inquiring into the media in the context of the Foxtel-Austar
merger - we've put out a statement of issues on that in recent days. Which itself has highlighted a
whole lot of issues concerning who owns the content, who might bid for the content in the future,
who might have the opportunity to distribute that content to customers, to consumers ... and so
these are all relevant issues that are being considered by the ACCC on a month-by-month basis.

The real issue I have to come back to is this: content is king, content is paramount, and what I
think we need to be looking at is how we control the ownership of that content in a way that
doesn't inhibit the competition.

That now is really on the cards, is sitting on there, on the horizon for telecommunications and
communications and media in this country through the National Broadband Network and the new
platforms that are available.

ALI MOORE: But do you have, as the ACCC, do you have any ability to regulate - not even control -
just regulate content under the current cross-media ownership rules, because they really deal with
medium, they don't deal with content?

GRAEME SAMUEL: I'd have to say to you that our current examination of the laws that are available
at our disposal, if you like, are showing up some deficiencies in our ability to deal with the
acquisition of and control of content.

See, if you already control a particular compelling sport content - the television, for example, of
one of the compelling sports, be it AFL or NRL or whatever it might be - then there's some very
real issues as to whether it's possible for real competition to come into place with new entrants
into the audiovisual market.

For example, the subscription television market, if that compelling content has already been sewn
up.

ALI MOORE: But it already has, hasn't it, Graeme Samuels? I mean, it already has: if you look, for
example, just at Telstra, they hold all the Internet and mobile phone rights to the AFL. I mean,
has the horse already bolted?

GRAEME SAMUEL: I'm not sure it's bolted, but I'd have to say to you that I think it's running very
fast at the present time, and there may have to be some catching up that has to be done.

That catching up might be able to be done by the ACCC, but it may well require some policy
intervention by government to try and deal with the matter. Look, we have regulatory settings in
place - including the structural separation of Telstra, the National Broadband Network - that gives
the real prospect of some very interesting competition in the distribution of audiovisual content
to consumers in one form or another, including news, including sporting content, movies and the
like, and I think what we've got to be very careful about is to ensure those regulatory settings
are now not impeded or inhibited by people taking control of content in a way that prohibits that
competition that is sitting in front of us at the present time.

ALI MOORE: Would you like to see a public interest test inserted into the media merger legislation
in this country, as it is in the UK?

GRAEME SAMUEL: Look, we're getting into policy areas, Ali, which certainly this week I'm not free
to talk about, and so it might be better if we have this interview next week then I can talk a
little more freely.

But the ACCC's concern is about competition. Once we get into public interest, we get into social
and potentially political debates which is outside the remit of the ACCC, as is diversity, I might
say.

We're dealing with competition, and competition in itself more often than not, in almost every
occasion, serves the public interest very well. You don't need public interest tests necessarily if
you've got a truly competitive market because a truly competitive market is one where consumers are
empowered to set their demands in place, and suppliers have to meet those demands.

ALI MOORE: You mentioned the NBN and I know that you've praised it as the catalyst for the
functional separation of Telstra and therefore bringing into gear more competition - for the first
pricing packages of the NBN have now been released and companies like the service provider
Internode say that their prices are likely to be pushed up because of decisions made by the ACCC,
in particular having far more interconnect points. Do you accept that argument?

GRAEME SAMUEL: No, I don't. Look, I think that what we're getting at the moment is some premature
positioning or pre-emptive positions by certain Internet service providers, and they're putting out
there their pricing factors, their pricing modules and the like.

I think what we need to do is this: we need to recognise that the ACCC has to consider a special
access undertaking that will be lodged with it by NBN Co, and that consideration will involve
looking at the terms and conditions, the equivalent offering of access to various Internet service
providers, and in particular looking at the pricing, the wholesale pricing that NBN Co will charge.

What we've got at the moment is a quite premature setting of prices by Internode. I notice, by the
way, if we read this morning's papers correctly that Internode has already been cut by another
Internet service provider.

What have we got? Competition.

That's what the ACCC will be working on over the next few months with NBN Co to set in place a
foundation for real competition to occur, and it may well be that we'll see some Internet service
providers starting to offer different service offerings, offer different quality of service, and at
the same time offering different prices.

ALI MOORE: Five more days in the top job after eight years, it's a very long time. Have you done
everything you set out to do?

GRAEME SAMUEL: Yes, look, I have to say to you that the Commission ought to be feeling very proud
of where we are at the present time.

I say the Commission because it's not Graeme Samuel, it's not even the six other commissioners,
it's the whole 800 people that form the hub of the Commission. They're the intellectual power,
they're the source of its integrity, the source of its rigour, and most important they're the
source of the trust that's been placed in them by Australian governments - not just the Federal,
but state and territory governments as well.

Look, our budget has almost tripled over the past eight years. The responsibilities that have been
given to us seem to come as an endless stream of new responsibilities. What governments are saying
are: "We've got a problem, it affects consumers, we trust the ACCC, ACCC will you deal with this
problem?" I think that's a great credit, I have to say, to the 800 staff that make up the ACCC.
They're the people that have shown its independence, rigour and intellectual integrity.

ALI MOORE: You've talked about some of the high points, and I know we mentioned earlier the action
against cartels and the case against Visy would be the most memorable there.

But many would say the low point in your reign is what followed that: the criminal case against
Richard Pratt for allegedly providing false information, a case which ultimately collapsed. Any
regrets?

GRAEME SAMUEL: No, not at all, Ali. The ACCC did what any regulator would have to do in the
circumstances, and the process is very simple.

If we have evidence of what we believe to be serious criminal misconduct, we must refer it to the
Commonwealth Director of Public Prosecutions for his opinion. We refer the file of evidence. The
DPP looks at it and he forms a view as to two issues.

One, has he got evidence that gives him a reasonable prospect of securing a conviction and then
secondly, most importantly, is it in the public interest that a criminal prosecution should take
place?

He made that decision. The criminal prosecution took place. You should remember that, even though
in the end certain evidence was ruled to be inadmissible by the judge as part of the preliminary
hearings.

ALI MOORE: That was the evidence collected as part of the civil case, wasn't it, that was proved to
be inadmissible?

GRAEME SAMUEL: Well yes, but just bear me out. What the court said was that is inadmissible,
although it would be admissible if there was a cross-examination that had taken place during the
course of the criminal prosecution, but importantly the DPP said, "It doesn't matter if that
evidence is not admissible. I have other evidence that is available and that is the evidence upon
which I would continue this case. I still believe, despite the inadmissibility of the evidence
ruled by the court, that I have reasonable prospects of conviction."

That's the determination of the DPP, and I think we have to say that both the ACCC and the DPP act
in accordance with the independence that is vested in them, and at the same time in accordance with
the public policy directives that are set there: that is, to act in the public interest.

ALI MOORE: At the same time though did that case take a personal toll on you? I know you've said in
the past you've had a lengthy personal relationship with Richard Pratt?

GRAEME SAMUEL: Well, it was very interesting, of course, and we must remember that when one gets
into these sorts of battles there will be very significant resources directed against the regulator
itself.

There will be legal resources, there will be public relations resources and the like. At one stage
it was suggested that I had a personal vendetta against Mr Pratt and then in the latter stages it
was suggested that I had a personal friendship with Mr Pratt.

Look, Ali, I have to say to you, when I first took on this job, I said perception will not be our
driver: that what we will do is we will act in the public interests, in the interests of the
Australian consumer.

That was the case throughout the whole of the Visy/Pratt exercise. It will be always the case for
the ACCC. Perception should not be - it was not then and it will not be in the future - our driver.

ALI MOORE: That brings me to my next question which again I guess is a personal one to a point.

You stood aside in the deliberations on the NAB-AXA deal because of a potential conflict of
interest in a private investment in the troubled DFO business. I know you consider that to be
personal and you don't want to talk about that, but given that it was in a blind structure and if
perception is not the driver, why did you have to step aside?

GRAEME SAMUEL: I think to protect in every possible way the integrity of the ACCC. I won't comment
upon the DFO issue, it's a purely personal matter, it has nothing to do with the ACCC, but it was
in my view essential that I stepped aside so that there could be no questions asked about the
integrity of the ACCC's processes in relation to the NAB-AXA matter, and that was entirely
appropriate.

I might say in circumstances where the CEOs of both AMP and NAB and AXA had all said they had no
objection to my continuing to be there, I just think it was better for the ACCC.

ALI MOORE: What's the message, though, of that exercise, if you like, to anyone, any business
person who chooses to go into public life?

GRAEME SAMUEL: Look, I think that there are some costs but I have to say that it's probably been
one of the most stimulating periods of my professional career. There could be, in this area of
competition policy and of acting in the public interest, nothing more satisfying than knowing each
day after you finish your day at the office - actually that's not the end of the day for me - but
when you do finish, that you can at least say today I've done something relevant for the Australian
consumer, and there's an enormous satisfaction doing that.

That's why we have 800 people who are totally committed within the organisation to doing what they
do. They feel they've been relevant every day.

ALI MOORE: Well, you moved between government and business circles, and of course your background
is as an investment banker. In recent days there's really been some unprecedented and very
high-profile criticism of the Government coming from key corporate members.

We've had the director of Westpac and BHP Billiton, Lindsay Maxsted, we've had Ziggy Switowski, Lee
Clifford from Qantas all saying they can't recall a time when the relationship between business and
government was more difficult. They've accused the Government of being unpredictable. Would you
agree?

GRAEME SAMUEL: Again, it would be much easier if you asked me to comment upon this next week rather
than this week, Ali, but let me say this. I think that it wouldn't matter whether Julia Gillard was
prime minister or Tony Abbott was prime minister; when you're operating in a minority government
situation you've got incredible difficulties.

You don't have command of the situation. You're reliant upon the support of some independents, and
in the case of the Gillard Government you're reliant upon the support of also the Greens. It makes
it very difficult indeed.

I think that we've got to recognise as well, that government is the driver of the bus. Business and
a whole range of other groups are important passengers in the bus. The driver has to take note of
what the passengers want, but the passengers also have to recognise that it's the Government that's
the driver.

ALI MOORE: And is the Government driving?

GRAEME SAMUEL: Well, look, I think that we're in a complex area at the moment. We're in a complex
area because business says it's never known a circumstance like this.

I actually don't recall in my lifetime that we've ever had a minority government in the way that
we've got it, and the alternative would be a minority government led by Tony Abbott. So either way
I think that we left ourselves - that is we the Australian electorate - left ourselves in a really
difficult, complex position for stable, secure government into the future as a result of the
election of a minority government. It wouldn't matter which party was in power.

ALI MOORE: Graeme Samuel, diplomatic to the end. Many thanks for joining us this evening and we
wish you the very best for whatever comes next.

GRAEME SAMUEL: Thanks, Ali.