Hamilton ISP takes Telecom to court in billing dispute

By MICHAEL FOREMAN

Hamilton-based internet service provider LG Holdings has applied to the High Court to set aside a statutory demand from Telecom for $200,000.

The statutory demand was served at the end of last month, after Telecom had already cut off all LG's circuits leaving around 300 clients unable to send or receive e-mail or use the internet for five days.

Telecom says LG Holdings had not paid for $200,000 in services that were not in dispute.

But LG managing director Lloyd Gallagher said he had filed documents with the High Court in Hamilton on Tuesday which showed Telecom had admitted making billing mistakes and had promised to correct them.

Mr Gallagher said the documents also showed Telecom has charged for non-existent 128kbps circuits. He was expecting a response from Telecom by the end of the week.

Telecom spokesman Andrew Bristol said Lloyd Gallagher Group has a $226,000 debt with Telecom and stopped providing service to stop further debt building up.

"It is important to note Telecom has received no payment from Lloyd Gallagher Group for a year and has continued to provide services over that period. This customer knew the situation was not sustainable and we took the standard step before eventually terminating services."

He said Telecom would resist Lloyd Gallagher Group's effort to have the Court set aside its debt recovery proceedings.

"Telecom is always reluctant to terminate services for a customer but this is one of those cases where commercially we have no real choice."

Mr Gallagher estimated the losses suffered by his clients as a result of disconnection last month amounted to around $1.2 million. He said following a successful outcome on the statutory demand hearing the company would then file a suit against Telecom to recover its losses.

Mr Gallagher said other internet providers who had experienced similar problems with Telecom over billing were waiting in the wings.

"If we go to court it will open the way for everyone else," he said.

Telecom has also accused Clear of owing $19 million in unpaid accounts. But last week Clear corporate affairs general manager Kevin Millar said Clear had presented Telecom with 300 pages of correspondence regarding its disputed invoices - including admissions by Telecom billing staff of overcharging.

Nick Wood, managing director of ihug, said his company had previously had disputes with Telecom, Clear and Telstra but they had been resolved.

"All telcos have problems with their billing, no one can put their hand in the air and say they don't happen - we've had disputes with all three carriers but usually we get them sorted."