Telecom's tactics set off inquiry

By CHRIS BARTON

The Commerce Commission is investigating a complaint by WorldxChange that Telecom abused its market power when it refused to switch WorldxChange's toll-bypass traffic to Clear's network.

The commission's Geoff Thorn confirmed that a full investigation was proceeding after WorldxChange complained at the start of June that Telecom's intransigence was because it did not wish to lose $6 million a year in interconnect revenue.

WorldxChange says it wants to switch its traffic through Clear to make cost savings which it will pass on to consumers. Telecom says the switching method WorldxChange proposed is outside the terms of its interconnect agreement and suggests Clear can make the switch by "activating" each of WorldxChange's 40,000 customers to Clear access codes at a cost of $6.41 each.

Clear carrier wholesale general manager Raymond O'Brien said Telecom could switch all WorldxChange customers in a day for under $2000 simply by pointing WorldxChange's access codes to Clear's.

"It's a simple software change," he told the Business Herald.

But since Telecom's refusal, Clear is proceeding with the $256,000 "workaround" suggested by Telecom - but only for 27,000 "non-code access" WorldxChange customers.

Mr O'Brien said the process would take weeks but would be transparent to those customers with WorldxChange's four digit access codes "pre-selected" on their lines.

"Pending the outcome of the commission investigation, we're considering our options on what to do with the $173,000 invoice from Telecom when it arrives."

Telecom spokesman Andrew Bristol said the company viewed the matter as a commercial dispute: "We're talking with the interested parties and are keen to get this resolved as soon as possible. We don't accept some of the things WorldxChange has said."

He would not say which statements Telecom disagreed with.

WorldxChange operations manager Paul Clarkin said the "third best" method of switching would provide a partial switchover to Clear, but was unworkable with its 13,000 code access customers.

"We would have to get all our code access customers to dial new four-digit access codes, which would be a huge inconvenience for them. We would lose customers."

Also at stake are lower-cost land to mobile calls which WorldxChange customers will get by piggybacking on an agreement for non-code access between Clear and Telecom due to start next month.

At present, customers wanting lower costs when making a home to mobile phone call using a carrier other than Telecom have to dial a four-digit access code first. Under the new arrangement, both Clear and WorldxChange customers will have the added convenience of not having to dial these codes as well as savings of 15c to 20c a minute.

Other carriers including Telstra, CallPlus and GobalOne are lobbying hard with Telecom and the Government to introduce similar services.

Mr Bristol said Telecom had built the platform for land to mobile non-code access and would provide it to other carriers before the end of the year.