ISPs near point of asking for ruling

Wholesale broadband negotiations between Telecom and internet service providers are on the verge of breaking down and industry sources say a request for a Commerce Commission determination is looming.

"A determination is going to happen one way or the other," said a source who asked not to be named. "It sounds like ihug is going to do it."

Ihug, the nation's number two wholesaler of Telecom's DSL broadband service, could not be reached for comment yesterday. But chief executive Mark Rushworth said last week that he had rejected Telecom's latest offer and was "fairly close" to a decision on seeking a determination.

Ihug and other ISPs had been mulling over making a joint application, but such a move is not possible under the law. Companies are not able to seek joint determinations, but can lodge applications at the same time.

Telecom, which announced its new retail plans two weeks ago, said negotiations were going well.

"We're pleased with the progress we're making," said Telecom spokesman John Goulter. "We have changed some of the terms and conditions and parameters around the offerings in line with what they were telling us they wanted. That's got to be progress from their point of view and ours."

Telecom is offering ISPs services that include a new top download speed of 3.5 megabits a second and upload speed of 512 kilobits a second. The company will make its plans available to customers in early April, but has yet to confirm a date. Goulter said that was because some behind-the-scenes network management needed to be done.

But number three DSL provider Slingshot said Telecom's latest offer was "commercially unacceptable".

Founder Annette Presley said Telecom had refused to specify how its new services would perform at peak times.

"For all we know, based on what they've told us in the past, these new products will operate at slower than dial-up speeds at peak times."

Presley also said that while Telecom had lowered the price of entry-level plans, data caps had also been significantly decreased.

"They're giving with one hand but taking away with the other."