Telecom is to pay five rival telcos $31.6 million to settle a Commerce Commission investigation into alleged overcharging for broadband services rather than face the courts.
While New Zealand's largest telecommunications company does not admit liability, the commission said in a statement the compensation paid to Vodafone, Orcon, CallPlus, Compass and Airnet "returned its commercial gain" from failing to provide the same priced access to a new broadband service as it gave itself.
The investigation stemmed from complaints in April last year, eight months after Telecom launched a new "sub-loop extension service" (SLES) which allowed rivals to offer voice services from their own equipment, housed in Telecom exchanges, and offer fast broadband from Telecom's network of newly installed roadside cabinets - part of its own roll-out of fibre-optic cable.
Telecom is obliged under formal Operational Separation Undertakings to offer competitors access to services on an equal footing in order to ensure retail competition.
The undertakings will be removed if, as expected, shareholders approve splitting Telecom and its infrastructure arm, Chorus, into separate companies at a vote next month.
