Govt mulled court action on Telecom

By Richard Braddell

WELLINGTON - The Government considered going to court to overturn Telecom's introduction of 0867 internet access, but decided that regulatory approaches to be determined by its telecommunications inquiry would provide a quicker solution.

Acting Communications Minister Trevor Mallard said it was clear that Telecom had acted anti-competitively and that it had managed to improve its market share as a result.

However, Mr Mallard also revealed that Clear Communications, which is losing millions in interconnection revenue, had rejected a Telecom offer, made under Government pressure, that would have "quarantined" the 0867 issue during the course of the inquiry.

"I should say that it wasn't through an excess of generosity on the part of Telecom that they came to that arrangement," Mr Mallard said, noting that rejection highlighted what for him were attitudinal differences between Clear, its owner British Telecom and its customers.

Telecom's general manager government and industry relations, Bruce Parkes, said Telecom had offered to suspend the 2c a minute charge for local net calls that were not using the charge-exempt 0867 suffix during the term of the inquiry, so long as Clear agreed to amend interconnection agreements so that internet traffic did not put the network at risk.

But Clear spokesman Ross Inglis said yesterday that the deal had been rejected because it was "one-sided."

But Mr Mallard also said a lot of work had gone into what was a very complicated area and that there were no obvious right or wrong positions.

Through arbitraging, competitors had managed to load interconnection costs back on to Telecom, and redialling by computers had put pressure on switching facilities at times.