Telecom told not to hobble ISPs

Douglas Webb

The Commerce Commission has warned Telecom against trying to stop internet service providers from seeking better broadband services through regulation.

In a letter to Telecom dated March 10 and released yesterday, Telecommunications Commissioner Douglas Webb said he was concerned Telecom was overstepping the mark during wholesale negotiations with ISPs.

He wrote: "Telecom may be encouraging ISPs to agree to a commercial bitstream offering on the condition that those ISPs agree that they will not apply to the commission for a variant bitstream service."

Signing a deal for one broadband service should not preclude ISPs from seeking determinations from the commission on other services, he said.

Most New Zealand ISPs resell Telecom broadband to their customers.

Webb's position would effectively clear the way for CallPlus and ihug to sign up for Telecom's new 3.5-megabit-a-second broadband services while still seeking access to 7.6 megabit speeds. The commission said yesterday CallPlus and ihug had lodged applications for that access.

Telecom did not respond to a request for comment.

In one wholesale offer to an ISP, Telecom said the service provider could not accept any regulated service or "directly or indirectly support any application for regulated bitstream service by any other person".

Telecom argued in a letter to the commission that it was justified in demanding ISPs give up those rights under the Telecommunications Act.

Webb rejected that claim. "I do not accept that the act sanctions such behaviour," he wrote.

Orcon - the third-largest wholesaler of Telecom's broadband - yesterday said it had agreed to the company's terms and would introduce 3.5 megabit services on April 2.

Orcon said its plans would have much larger data allowances than Telecom's. Orcon's basic broadband plan, with a 256 kilobit download and 128 kilobit upload speeds, will cost $29.95 a month. The service is the same price as Telecom's basic plan, but includes 2 gigabytes of data use compared with xtra's 200 megabytes.

Orcon's manager of regulatory affairs, Scott Bartlett, confirmed the company would not be able to support CallPlus and ihug in their applications because of its deal with Telecom.