Free internet under threat

By CHRIS BARTON

Cheaper fast-internet access early next year, but uncertainty for users of free internet. Those are the likely outcomes for consumers from an 11th-hour agreement between Telecom and Clear on the eve of the Telecommunications Inquiry's recommendations going before the Government.

Described as a "comprehensive clean slate," the accord promises to settle a bitter and long dispute between the two companies.

The arrangement simplifies a complex set of interconnection agreements that cover network-sharing. Clear, which has long argued that it pays Telecom too much, will pay $20 million less than it did last year but will also make a $35 million lump-sum payment.


But the deal effectively puts a cap on the reciprocal payments Clear receives from Telecom. This finances providers of free internet such as i4free and freenet, who use Clear's network, and the company would not say whether the money would continue.

Clear says the matter is up for renegotiation. Its own free service, zfree, will continue by finding alternative means to generate revenue, such as advertising, taking a cut on online sales and "cross-selling" other services such as toll calls.

Clear has also brokered a deal to wholesale Jetstream, Telecom's brand of fast internet, which had been available only through Telecom or its resellers.

The Telecommunications Inquiry recommendations, due to be made public today, are likely to include the need for a regulator to oversee competition issues in the deregulated market.