Rival telcos aim to stall Telecom move

By Richard Braddell

WELLINGTON - A group of Internet service providers and telephone companies is appealing to Telecom to delay its new Internet connection regime, at least until they can make an orderly transition to stop an "irreversible loss of customers".

In a joint letter to Telecom, also sent to ministers, Max Bradford, Maurice Williamson and Bill English, the group said that Internet providers faced irreversible customer defections if they were unable to migrate customers to the 0867 access code.

A fortnight ago, Telecom shocked the Internet community by announcing that it would charge Internet users two cents a minute for standard local dial-ups but would forego that charge if users moved to an 0867 access code.

While Telecom described the move as one intended to improve management of its local call network for the benefit of voice customers, the move has run into the barrage of criticism from other telco and Internet providers.

However, two meetings of providers have so far failed to come up with an expected legal challenge, with suggestions that they have been overawed by the probable cost. Among objections are:

\EE The two cents a minute charge is in breach of the free local calling stipulation of the Kiwi share.

\EE Telecom will circumvent tens of millions of dollars in interconnection charges due to other carriers because the 0867 number is not covered by interconnection agreements.

\EE The arrangement is an abuse of market power which gives Telecom a stranglehold on the Internet market.

In the end, resistance may be strongest from those carriers who could withhold payments on interconnection equivalent to those lost from the migration to 0867.

That would leave it for Telecom to go to court to seek payment, opening the way for another protracted bout of litigation.