TelstraClear Calls On Commissioner

17 May, 2002

TelstraClear today submitted a formal application for a determination from the Telecommunications Commissioner to set prices and terms of supply for interconnection with Telecom's network and key regulated wholesale services.

TelstraClear's CEO, Rosemary Howard, said the application, filed at lunchtime today, was made reluctantly when it became clear that talks between the two parties had stalled.

"We were surprised tonight to hear that Telecom also intends to file with the Commissioner," she said.

"However, it is pleasing to note that Telecom agrees negotiations have stalled and in these circumstances it is best to rely on the independent judgement of the Government's recently appointed Telecommunications Commissioner to achieve a fair and fast outcome.

"The Government has made it clear that a new regulatory framework was needed in order to bring the benefits of competition to more New Zealanders, more quickly. This step we are taking demonstrates our faith in that new framework, and will benefit all New Zealanders. "Commercial negotiations started prior to the expiry of CLEAR's agreement in September 2001 but we have been unable to reach a new commercial agreement for interconnection and wholesale access with Telecom.

"I am very disappointed a commercial agreement is no closer than it was eight months ago, especially as in that time the Commerce Commission has released international benchmark pricing that backed our view that our offer to Telecom was very reasonable.

"In the meantime, Telecom/AAPT and Telstra have reached commercial agreement on access in Australia without requiring regulatory intervention," Ms Howard said.

"Telecom argues for lower access prices in Australia (and gets them commercially) and then refuses to agree to lower prices in New Zealand, instead offering interconnect rates that are more than double the price of access in many comparable jurisdictions.

"While it is regrettable for TelstraClear that we continue to pay higher costs for network interconnect and wholesale capacity, once again it is New Zealanders who lose out as Telecom refuses to embrace the opportunities for us all in the new telecommunications era.

"Unfortunately for New Zealand's economic transformation, Telecom seems wedded to the past. Businesses and residential customers deserve greater competition, more innovation, better services and better prices.

"TelstraClear is committed to that action and to providing customer reach throughout New Zealand, but first we must reach a fair agreement with Telecom on interconnection and wholesaling. Unfortunately we have not been able to achieve that through commercial negotiations so we are left with no option but to turn to the Telecommunications Commissioner.

"We have advised Telecom that we wish to accept wholesale access to residential services as provided for in the Telecommunications Act, and are hopeful that we will be able to conclude commercial terms on at least that set of services in a reasonable period of time. TelstraClear values our residential customers, and is intent on bringing the benefits of competition to more households, just as soon as is possible."

Ms Howard said she was surprised that Telecom is claiming that TelstraClear owes it $40 million for services received.

"TelstraClear does not agree with this. In our application to the Commissioner we state that billing is an area that has consistently given rise to disputes between Telecom and its customers and competitors. For its part, TelstraClear is very concerned about the accuracy and integrity of Telecom's billing and billing procedures. TelstraClear's application asks the Commissioner to determine applicable procedures and obligations necessary for billing accuracy and integrity.

"TelstraClear believes Telecom has over billed TelstraSaturn, CLEAR and now TelstraClear over a period of years to the tune of tens of millions of dollars. We have continued to pay Telecom monthly in advance what we believe is a fair rate while we try and settle this dispute commercially."

Ms Howard said this billing dispute had nothing to do with the stalled interconnection and wholesale negotiations.

"Today we have applied for a determination in relation to PSTN for services such as interconnection and key regulated wholesale services such as data services. The Commissioner will now follow due process under the Telecommunications Act and decide the prices and terms on which we could not agree."

Ends

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