Telecom's Xtra caught in net

By RICHARD BRADDELL

WELLINGTON - In its third judicial encounter in a week, Telecom was told last night it must restrict Internet traffic during overloads across all providers including Xtra, its own Internet service.

Telecom spokeswoman Linda Sanders said the company had sought clarification from Justice Judith Potter in the latest round of its fight against i4free, a free Internet service provider.

Justice Potter had ruled on Friday that Telecom could not discriminate against i4free by restricing only its calls if Telecom exchanges became overloaded.

The ruling required Telecom to spread the cuts among Internet service providers using Telecom's 0867 access regime. But in a conference call with the parties at 8:30 last night, Justice Potter said her ruling included Xtra - even though its numbers use the 0873 prefix.

"If you are going to restrict i4free then you have to restrict every ISP on a proportional basis including Xtra, as I have already ruled," Ms Annette Presley, chief executive of 14free, quoted Justice Potter as saying.

Earlier yesterday, 14free rejected Telecom claims that Clear Communications is underwriting its High Court action against Telecom's attempts to block its service.

"We are paying our own legal bills, which we envisage will be a huge part of our costs," Ms Presley said. These costs amounted to $20,000 a day.

But Clear had provided the High Court with an indemnity against any Telecom counter-claim for damages should 14free be unable to meet them from its own resources.
Telecom spokesman Glen Sowry reiterated the claim that Clear, and effectively its owner, British Telecom, were working in an alliance with i4free.

Clear has made no secret that it is sharing interconnection revenue with i4free that Telecom pays to terminate calls to i4free on the Clear network.

Mr Sowry said that, and the fact Clear was prepared to stand behind i4free to the tune of $500,000 in the event of a successful damages claim, were proof.

He also said Clear had rejected an effort by the Government to broker a standstill arrangement which would have ended the 2c-a-minute charge imposed by Telecom on internet calls outside its 0867 access regime. The offer also preserved Clear's rights to interconnection revenue from Telecom until the end of this year when its interconnection agreement expires.

Telecom said yesterday that the interconnection payments to Clear would be based on the level prevailing in January, but the arrangement had a clause enabling interconnection revenue to escalate in line with the total growth of the market. Telecom estimated it would grow by 70 per cent this year.

But Clear spokesman Ross Inglis said the offer had been a "Clayton's" one because it was based on January levels, after which Clear had lost a large number of customers due to Telecom's introduction of its 0867 access regime.

Telecom yesterday declined to confirm reports it had paid up to $20 million to ISP ihug to encourage it to make the transition to the 0867 regime.