TelstraClear calls in umpire

By CHRIS BARTON and PETER GRIFFIN

The Telecommunications Act is about to get its first real workout as TelstraClear takes its longstanding disputes with Telecom to the Commerce Commission.

TelstraClear has asked the commission to step in and set prices on interconnection to Telecom's network and wholesaling of its services.

TelstraClear chief executive Rosemary Howard said the action was necessary because so little progress had been made in eight months of negotiations with Telecom.

"It's disappointing that we haven't been able to reach agreement, particularly given Telstra Australia and Telecom [AAPT] have been able to do so on the other side of the ditch in a shorter period of time," she said.

On being told of TelstraClear's application by the Herald, Telecom hastily called a press conference and claimed it was applying for a determination itself.

But Commerce Commission spokeswoman Jackie Maitland said the commission had received a faxed note at 6pm yesterday outlining Telecom's intention to submit its own application.

Telecom chief operating officer Simon Moutter said the company had grown increasingly frustrated with TelstraClear, despite maintaining a willingness to negotiate.

"[TelstraClear] has been mucking around on interconnection pricing for some time," said Moutter, adding that TelstraClear owed Telecom $40 million.

Howard disputes that, claiming Telecom actually owes TelstraClear "tens of millions of dollars" because it overcharged Clear and TelstraSaturn for services delivered over several years.

She was willing to have an independent auditor look at the billing records of TelstraClear.

Clear's interconnection agreement with Telecom expired in September and TelstraSaturn's expired in January. Since then TelstraClear, following the merger of TelstraSaturn and Clear in November, has been making interconnection payments to Telecom at a reduced rate with an agreement to make adjustments when a contract is signed.

For the nine months to March 31 Telecom's interconnection revenue was $86 million, down 19 per cent on the previous corresponding period.

TelstraClear is seeking interconnection payments of about 0.14c to 1.4c a minute, in line with international benchmarks. Telecom wants interconnection payments of 2.6c a minute - its present level.

TelstraClear has also asked for a ruling on wholesale costs on a range of services including broadband - again in line with international benchmarks of 17.5 to 25 per cent less than retail.

"We've made a number of offers to Telecom, which in comparison to international benchmarks are generous on our part. We've got nowhere on price and non-price terms for wholesaling," Howard said.

In addition it wants the commissioner to designate reasonable terms for the provision of services, fixing of faults and quality of billing.

"We're asking for non-discriminatory access.

"We feel we don't enjoy the fault restoration quality that Telecom gives itself or its own customers," she said.

Under the new act Telecommunications Commissioner Douglas Webb has 10 working days to decide whether to investigate.

A determination could be several months away.