Commerce Commission to appeal Telecom dial-code decision

The Commerce Commission is seeking leave to appeal to the Supreme Court a long-running dispute with Telecom.

The Court of Appeal and High Court have previously ruled in Telecom's favour in the case.

The commission believed Telecom used its dominant market position and had an anti-competitive purpose when it introduced charges for residential customers using dial-up internet 10 years ago.

In June 1999, Telecom announced residential customers would be charged for calls to internet service providers (ISPs) unless they used an 0867 dial code.

Telecom made the 0867 number range available to other telecommunications network operators only if they agreed that the 0867 number range was not covered by existing interconnection agreements, so that Telecom was not required to pay charges relating to those calls.

Telecom sought to introduce a two-cent-per-minute charge to customers not using the 0867 prefix after 10 hours' use.

The commission alleged that by introducing the 0867 scheme, Telecom sought to prevent or deter competitive conduct by other carriers and ISPs.

The High Court ruled in Telecom's favour, saying even if it wasn't the dominant force, it would still have been able to introduce the scheme.

A challenge was lodged with the Court of Appeal which was turned down.

The commission said yesterday that the issue was the application of the so-called counterfactual test that has been developed by the Privy Council as the sole test for determining whether conduct by a dominant player in the market was competition on the merits, or an unlawful use of market power.

- NZPA