TelstraClear, Telecom resolve local billing stoush

By PETER GRIFFIN

Telecom and TelstraClear have patched up their dysfunctional relationship and ended several long-running disputes, leaving just one issue at the mercy of the industry watchdog.

The two telcos said yesterday that they had resolved their conflict over local call billing, agreeing not to charge each other for local calls, including internet traffic.

The deal follows the announcement on Friday that they had ended "all historical billing, interconnection, wholesale and performance issues between the parties".

TelstraClear has long maintained it was being heavily overcharged for network services supplied by Telecom and, as a result, withheld some of its payments totalling millions of dollars. TelstraClear spokesman Mathew Bolland said the slate had been wiped clean of niggling historical issues.

Yesterday's pact is in line with the view of Telecommunications Commissioner Douglas Webb that local calls should be charged on a "bill and keep" basis, rather than be subject to interconnection fees.

Although the deal clarifies an issue which caused problems in the past, notably when free internet providers such as i4free bled Telecom of an estimated $40 million a year in interconnect payments, its main merit is that it makes life easier for both telcos.

Billing administration is simpler, and internet traffic can for the first time be managed to make optimum use of networks.

TelstraClear chief executive Rosemary Howard said having an umpire, in the form of commissioner Webb, helped promote an agreement.

"We've achieved more in the last 10 months than in the last 10 years, and the commissioner has yet to make his first decision," he said.

Another aspect of the agreement would allow number portability for 0508 and 0800 toll-free numbers. A business owner with a toll-free phone number would now be able to move from one network provider to another and retain their original phone number.

Telecoms users are yet to enjoy number portability for standard fixed-line phone numbers and mobile phone numbers. Incumbent telcos have generally resisted moves towards portability, as it encourages customer "churn" as users change networks in pursuit of lower prices.

Telecom chief operating officer Simon Moutter said the agreement was arrived at "following a constructive process of information sharing".

Telecom and TelstraClear are still eagerly awaiting final decisions on the contentious issues of interconnect and wholesale pricing.

The Commerce Commission, which has already issued a draft decision on interconnect, has recommended Telecom lower the price it charges TelstraClear for access to its network from 2.6c a minute to between 1.21c and 1.42c a minute.

Both parties will air their views on the issue at a two-day conference in Wellington starting today.