Telecom and Clear call truce in internet war

By RICHARD BRADDELL

WELLINGTON - Telecom and Clear Communications could be on the brink of a new era after yesterday signing a 3 1/2 month ceasefire in their internet interconnection war.

The agreement is intended as a prelude to a more lasting peace based on a comprehensive interconnection agreement, to replace the one expiring at the end of the year.

The pact was signed after top-level involvement, including the participation of Telecom chief executive Theresa Gattung.

As Clear executives last night declared their delight at a "comprehensive commercial package," Ms Gattung said the deal was a "breakthrough in terms of the companies having a more constructive relationship."

She said the agreement provided a breathing space for the two companies to work on a new interconnection deal that both would find satisfactory.

Rather than taking the five-year "crystal ball" view that the 1986 agreement involved, both sides said the new interconnection agreement was likely to be more adaptable to a changing market and probably, in the first instance, would last for only a year.

Meanwhile, Telecom has agreed to suspend its 2c a minute charge on local dial-up connections used by Clear's internet customers.

In return, Clear has given up its long-standing opposition to 0867 numbers, instead agreeing to encourage its customers to make the move.

Changes in key personnel at Clear and Telecom in the form of appointments of two women appear to have made the difference.

Observers say that Ms Gattung and Rhoda Holmes, the alliance director of Clear's 100 per cent-owner British Telecom, have developed a rapport that has eased the path in high-level negotiations that began in earnest only two weeks ago after Clear asked Telecom to renegotiate interconnection.

Ms Holmes is said to have been a big influence in Clear's direction since she arrived at the company from Britain late last year.

Clear's director for interconnection, Kevin Millar, said Clear continued to assert its right to termination payments. He said Clear was "very pleased overall with the comprehensive commercial package."

Among key points of yesterday's agreement are:

* Clear will sign an 0867 "internet access" agreement, initially lasting until the end of August.

* Clear will withdraw its application for an interim injunction requiring Telecom to honour the terms of the number portability agreement between the two companies.

* Telecom will not appeal against a related interim injunction gained by free internet provider i4free last month.