New leaders to tap 0867 issue

By RICHARD BRADDELL

WELLINGTON - The incoming Labour/Alliance Government will move quickly to address potential anti-competitive issues raised by Telecom's 0867 internet access arrangement.

Labour has already promised an in-depth review of the telecommunications environment, but a Labour source said yesterday that the new Government was aware that early moves on 0867 were necessary because of the risk delay could cement Telecom's position in the internet market.

Labour's commerce spokesman, Paul Swain, is expected to take over the telecommunications portfolio along with commerce when the new cabinet is formed.

While it is not certain what actions the new Government could take against Telecom with regard to 0867, it could follow a Crown Law Office opinion that the 0867 inititiative could be a breach of the Kiwi Share.

Control of the Kiwi Share is exercised by the Minister of Finance.

Meanwhile, the 0867 regime has been the subject of continuing complaint from internet service providers who say Telecom has failed to measure up to undertakings to the outgoing Government that it would provide equivalent quality 0867 service to the local dial-up access it replaces.

Competing carriers have also had concerns about 0867 because it replaces existing interconnection agreements for local service, denying termination revenue in some cases.

Saturn Communications, which signed with Telecom at the eleventh hour before 0867 came into effect, is believed to have agreed to a formula under which internet traffic to and from Telecom passes without charge.

But Clear Communications has refused to sign up to 0867, almost certainly because it stands to lose interconnection revenue in excess of $20 million.

However, the absence of an 0867 interconnection agreement with Telecom has put some providers in a bind because while their customers have changed to 0867 access, they cannot receive calls because Telecom has been unable to provide data links.

Clear can provide the links, but Telecom will not allow it to do so without an interconnection agreement.

A Commerce Commission review is expected to report either this week or next.