Telecom rivals urge government to open local line access

1.00pm

Telecom's rival companies today urged the Government to give consumers greater choice, which they say will lead to cheaper phone services.

Five of Telecom's rivals today presented Communications Minister Paul Swain with 61,000 responses to a campaign calling on the Government to open up access to Telecom's local line network.

The companies TelstraClear, Slingshot, ihug, Compass and CallPlus say such a move will cut local phone costs by $84 a year per household.

Telecom charges about $33 per month for phone line rental in parts of Wellington and Christchurch where there is competition, but charges about $40 over the rest of the country leading to accusations of price gouging.


TelstraClear chief executive Rosemary Howard said today it would be a blow for consumers if Mr Swain accepted Telecommunications Commissioner Douglas Webb's report to retain the status quo.

Telecom presently held a monopoly over local lines allowing it to charge higher prices, she said.

"These (61,000) letters show New Zealanders want change. They don't want to keep paying more than they have to," she told reporters.

"Research... shows there is widespread concern about Telecom's double standards."

Slingshot founder Annette Presley, also director of CallPlus, said it was hard to fathom why the commissioner had reversed his earlier draft report which recommended opening up access to the local lines.

"If someone could tell us why we don't have freedom of choice in New Zealand... then maybe there would be something to go forward with and debate, " she said.

"By picking one simple issue and pointing out one example of how Telecom behaves where it had no competition, people have been able to see just how far Telecom will go to protect its monopoly position."

Mr Swain said he was currently considering final submissions on the commissioner's report and investigating why its finding was so different from the draft report.

He will make a decision in May.

Mr Swain has three options -- he can accept or reject the report in full or send it back to the commissioner and instruct him to do more work on specific points.

Mr Swain said the decision on access to local lines was probably the most "critical" decision the industry faced in the next decade.

Telecom spokesman John Goulter told NZPA the telecommunications commissioner's report was primarily in relation to broadband internet access and it had addressed that by ordering Telecom to provide access to rival companies to its broadband access technology.

The campaign by the rival companies in relation to local calls was a "red herring", he said.

- NZPA