Bid to switch networks seems headed for court

By CHRIS BARTON it editor

The dispute between Telecom and WorldxChange may escalate towards a court injunction.

After Telecom refused to switch WorldxChange's toll bypass phonecalls to Clear's network, WorldxChange complained to the Commerce Commission last Friday, accusing Telecom of abusing its market power.

It claims Telecom is delaying the changeover because it does not want to lose termination payments of nearly $6 million annually for carrying WorldxChange's traffic.

WorldxChange wants to use Clear for cost savings that it says it will pass on to customers. Clear can offer a cheaper price because it has a better interconnection agreement with Telecom.

"It looks to us as though Telecom is refusing to supply services," says Clear spokesman Kevin Millar.

"We're not happy with the situation."

Telecom says it will not switch WorldxChange because the request falls outside their agreement.

Telecom spokesman Simon Moutter says the issues raised by WorldxChange came as surprise. But WorldxChange says the three parties have been addressing the matter for a month.

"The interconnect agreement with Telecom is not the issue," says Paul Clarkin, of WorldxChange. "I've got agreements like that with all the carriers. It doesn't mean I have to use it to originate our traffic."

The statements have a familiar tone - heard early last year, just before Clear stepped into a High Court injunction hearing to stop Telecom from disconnecting free internet provider i4free.

Though i4free won that injunction, allowing routing of its traffic to Clear, the full case - now joined with a Commerce Commission case in the High Court at Wellington - is still to be heard.

Malcolm Dick, of telecommunications company CallPlus, says it would take a few keystrokes for Telecom to change over WorldxChange.

"In a deregulated telecommunications market Telecom should have an absolute obligation to switch customers when they ask."

As a part-owner of the now-defunct i4free, Mr Dick is seeking about $20 million in damages from Telecom.