Small ISP rejects Telecom proposal

By RICHARD BRADDELL

WELLINGTON - Wave Internet, a small but vocal internet service provider during the 0867 access spat, has rejected Telecom's proposal that ISPs bear the cost of internet calls.

Telecom's proposal was contained in its submission to the Government's telecommunications inquiry. It suggested that while ISPs bear the traffic costs, they could be free to pass them on to customers or absorb them as their business models permitted.

Wave said yesterday that in the current economic environment, ISPs would be forced to pass those costs on to consumers.

It also argued that the costs arose from Telecom's need to upgrade its network to internet standard.

"If Telecom is successful with this proposal, they will effectively have managed to avoid having to reinvest their own funds and will be leveraging their monopoly position for their own benefit," said Wave manager Wayne Attwell.

In its submission to the inquiry, Telecom admitted that it would have to spend between $230 million and $550 million to bring its entire network up to basic internet capability.

Wave said: "A major factor in the rejection of this proposal is Telecom's recent admission that their telecom's infrastructure is some four to five years behind where it needs to be."

This came as no surprise given several years of "maximising revenues for shareholders at the expense of reinvestment in the network infrastructure."

Wave said the time would come when the situation of internet calls being carried over voice networks would be reversed. Voice would instead be carried over internet networks.

Then the Kiwi share's guarantee of free local calling would effectively be bypassed.