Commission suggests interconnection fee cut

The Commerce Commission today recommended that the price Telecom and TelstraClear pay to connect to each other's network be reduced.

In a draft determination released today the commission proposed cutting the "interconnect" fee that TelstraClear and Telecom pay each other from 1.13c per minute to 1c per minute.

The interconnection price is the per minute charge payable by one carrier to the other for handling various call types between the two networks.

The commission set the 1.13c price in November 2002, but both Telecom and TelstraClear asked for a review.

The commission recommended that the 1c per minute fee be backdated to June 2002, with the companies reimbursing each other for payments made back to then.

A final price will be set after the commission considers submissions from interested parties. Submissions on the draft are due by May 9, and cross-submissions by May 23.

Telecom had earlier challenged the scope of the commission's power to carry out this pricing review and to determine the commencement and expiry dates of the determination. The High Court last week dismissed Telecom's challenge and ruled that the commission does have jurisdiction to adjudicate these matters.

- NZPA