Woosh Wireless, which failed to deliver high-speed broadband internet to Wairarapa schools, may face legal action.
Telecom replaced Woosh in the Wairarapa, Northland and Canterbury when Woosh was unable to meet the deadline for Project Probe, the Government's initiative for rural broadband.
A spokesman for the Tararua-Wairarapa Regional Charitable Trust, Geoff Copp, said taking Woosh to court had not been ruled out.
The trust was still in discussions and hoped Woosh would still come into the region.
"We are still talking with Woosh and hope to reach an amicable agreement," he said.
"We don't want to go the legal route but Woosh's failure has raised questions of credibility and has cost many hundreds of thousands of dollars."
Northland was also negotiating.
One of the reasons the trust had gone with Woosh was the hope that having another telecommunications company in the Wairarapa would break Telecom's near-monopoly in the region.
Copp still believed Woosh could eventually have set up its wireless broadband connection, but the company could not meet the deadline.
Woosh had decided to focus on the urban centres.
Copp said he believed the whole of the Wairarapa would eventually get broadband, probably with a combination of fibre-optic cable, copper wire and wireless.
- NZPA
Wairarapa mulls lawsuit after Woosh Probe walkout
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