CallPlus defending attempt to avoid Telecom payment

By PAUL BRISLEN

Auckland telco CallPlus is defending its attempts to avoid paying Telecom to cover loss-making customers.

CallPlus co-founder Malcolm Dick said the cost of maintaining those customers was built into the selling price when Telecom was privatised in the early 1990s.

"The purchasers deducted a significant sum to cover this obligation when they purchased Telecom from the Government, and now they are demanding it be paid again by competitors."

CallPlus has split its company in half in an effort to avoid being considered a "liable person" under the Telecommunications Act.

Under the provisions of the act, competing companies are required to pay Telecom a share of the costs of keeping commercially non-viable customers attached to Telecom's network.

Dick is particularly upset that competitors will have to pay Telecom more should they win market share off the incumbent.

"Under this regime, Telecom has no incentive at all to act efficiently or cost effectively in delivering these services."

Dick's partner, Annette Presley, said the act needed overhauling to take into account changes in technology and capability.

Presley would like to see the cost of providing these services to commercially non-viable customers tendered out to all telcos.

Communications Minister Paul Swain is considering such a move and is due to announce his decision in the next few days.

Compass Communications is also rebelling against the charge. It has told the Telecommunications Commission that a large percentage of its revenue is delivered over TelstraClear's network and should not be part of the assessment of how much it would pay.

The commission has released its draft assessment of the costs of maintaining the "telecommunications service obligation" among those customers who are deemed to be commercially non-viable.

Eight telcos must pay Telecom $16.62 million to keep 62,995 customers connected to the phone network.

Compass chief executive Karim Hussona said the commission had left out liable companies that should, by definition, be included in the cost-sharing.

"The commission has ring-fenced those companies that have an interconnection deal with Telecom and has said they are liable, everyone else is not. That's not what the act says."

The act refers to only two specifications for a company to be included in the cost-sharing exercise. It must have a network that is "interconnected" with Telecom's and it must provide a telecommunications service in New Zealand to end users.