Net service to sue Telecom over cuts

By MICHAEL FOREMAN

Hamilton-based internet and telecommunications provider LG Holdings says it will sue Telecom for cutting its internet and telephone circuits after a dispute.

Managing director Lloyd Gallagher said the dispute centred around circuits that could not be used for three years because Telecom had installed governors which limited their use.

On October 17, Telecom cut off all circuits, leaving around 300 LG Holding's clients unable to send or receive e-mail or use the internet for five days.

Mr Gallagher said LG Holdings had restored the service by bypassing Telecom, but had lost two contracts in China and India, which together were worth several million dollars.

"We'll be suing Telecom for these and other direct losses as well as costs incurred in getting 300 clients back on line," he said.

"We have alerted our clients and they are calculating their losses with a view to launching a class action against Telecom later on."

Mr Gallagher said Telecom had charged for three unused 228 Kbps A1 circuits for three years, and it had also overcharged for one 512 Kbps circuit.

But Telecom spokeswoman Mary Parker said all the circuits, including the $26,000 of services that were in dispute, were available for the purpose for which they were sought.

Ms Parker agreed that Telecom had disconnected all LG Holdings' services, but said this was because for more than a year, LG Holdings had not paid for $200,000 in services that were not in dispute.

In 1999, the Lloyd Group laid a complaint with the Commerce Commission relating to it being prevented from offering digital subscriber line (DSL) services using Telecom supplied circuits.

Last year the commission found in Telecom's favour.

LGR Tech