Telecom's hard ball tactics may rebound

By Richard Braddell,br>
Between the lines

Whatever happy illusions Communications Minister Maurice Williamson has held on the state of harmony in the telecommunications industry must surely have been shattered by Telstra New Zealand's decision to go to court last week.

Often cited by the minister as the very model of the proper telecommunications company, Telstra joined the naughty boys - Clear and the now-departed BellSouth - in going litigious and abandoning its heartfelt belief in taking the market as it finds it.

Telstra's chief executive, Peter Williamson, was hardly backward in letting the media know of its troubles with Telecom either.

Telstra has every reason to fear Telecom's cancellation of re-billing arrangements as the impact would be to remove a vital management tool for its customers.

But jettisoning its "doers, not suers" positioning is a remarkable turnaround because its willingness to go with the flow must owe much to the fact that the positions it might have attacked are not dissimilar to those it is defending against competitors on its home turf in Australia.

Indeed, one could argue without too much cynicism that its willingness to meet Telecom's terms when it signed the first number portability agreement lay in those considerations.

The same might apply to its support of the number administration deed, a document rejected by some other companies, partly for its secrecy provisions, but more so for coercive arrangements about working towards a long-term solution to the number portability problem.

Telstra has come out of the closet.

But it is not the only carrier declaring dissatisfaction in its dealings with Telecom.

Clear, also, is unhappy about the re-billing cancellation, while WorldxChange has complained to the Commerce Commission about difficulties in some instances with customer non-code access.

Telecom's withdrawal of letters of authority to enable other companies to work on Telecom equipment is another problem.

The picture emerging is that Telecom has hardened its stance towards the other carriers.

But to go the extra step and provoke the company most supportive of the regulatory status quo is quite another thing.

That could have a lot to do with Telstra's undoubted success in the high-value corporate market where late last year it took the contract to manage Fletcher Challenge's telecommunications requirements, despite Telecom's chief executive Dr Roderick Deane's presence on the Fletcher board.

It is worthy of note that the final decision to go to court was made in Sydney, not New Zealand; the clear message being that the legal resources of a company many times the size of Telecom will be brought to bear.

Even so, Telecom has a demonstrated record of being legally correct in its dealings with other carriers. It may well win.

Then again, this latest row could be for Telecom the commercial equivalent of bombing Pearl Harbour.