Telcos back from the brink

By PETER GRIFFIN

Telecom and TelstraClear have narrowly avoided dragging their network interconnection dispute through the courts, striking a commercial deal that will stand until the telecommunications commissioner sets interconnect pricing.

In a confidential agreement drawn up by the two yesterday, TelstraClear is understood to have agreed to increase the monthly payments it makes to Telecom in return for its rival supplying much-needed access links to the Telecom network.

TelstraClear had been seeking an interim injunction against Telecom under the Commerce Act to try to force Telecom to deliver the links, which it claims to have been requesting since August. The injunction was dismissed as a result of the agreement.

But the deal appears to be a greater victory for Telecom, which has been complaining that TelstraClear has been short-changing it for months.

The Herald understands the deal means TelstraClear will pay Telecom up to $12 million a month for interconnection - up from the $6 million to $7 million a month it has been paying since late last year.

TelstraClear and Telecom spokesmen refused to comment about the terms of the deal.

Telecom is believed to have agreed to supply TelstraClear with several links, including three in the South Island in the next two days. In return, TelstraClear will agree to pay Telecom for services at the same rate as when it traded as TelstraSaturn, before the merger with Clear Communications.

The deal gives TelstraClear additional capacity to carry 0800 traffic to its network. Earlier in the year, TelstraClear's call centre customers were complaining that calls originating from Telecom's network were not getting through at peak calling times, a factor TelstraClear put down to Telecom's stubbornness in holding back the links. The call glitches hit South Island customers in particular.

Telecom in turn will receive monthly payments closer to what it believes TelstraClear should be paying. Historic disputes between the two involving tens of millions of dollars in overcharging and under-paying remain unresolved.

Legal teams from Telecom and TelstraClear turned out en masse in the High Court at Auckland yesterday ready for two days of court proceedings, only to pile into private meetings to hammer out a deal.

Justice John Priestley said the matter would ultimately be best dealt with under the processes of the Telecommunications Act, but labelled the agreement a "sensible settlement".

"I don't think the problem would go away if an injunction was granted, anyway," he said.

Telecommunications Commissioner Douglas Webb is already considering applications from both TelstraClear and Telecom to set interconnect pricing.

A decision on pricing is expected by August. The agreement nailed down yesterday allows for resulting payment changes to be backdated to when it was drawn up.


Details of Telecom's past interconnect agreements with TelstraSaturn and Clear Communications