Between the lines: 0867 row wakes up sluggish guardian

It didn't happen overnight, but it did happen ... 14 months later.

The Commerce Commission not only made its view known on Telecom's introduction of 0867 internet dialling, it did so by taking Telecom to court.

This is an argument in which Telecom has few friends. While there was undoubtedly merit in its claim that 0867 would help network management as internet use soared, there was just too much reason to think there were ulterior motives such as avoiding internet interconnection payments to Clear.

But one can sympathise with Telecom, which seems wounded that the commission went ahead with the action, without nary a hint that it intended to do so, and so long after the event.

"Why now, fellows?" many in the industry are asking, since many of the issues are being resolved anyway.

The commission is adamant that it has taken so long because of the complex legal and economic issues and the truckloads of information that had to be assessed.

That might be so. But an action against Telecom at this time might do no harm to the commission's standing, particularly as it heads towards an enhanced regulatory role in the electricity industry and, perhaps, in telecommunications itself.

The truth is that these actions can take ages to get under way. When the commission cleared Telecom's pricing, when Saturn rolled out in Wellington, its inquiry was completed in four speedy months. But another determination in Telecom's favour - that allowed it to refuse to provide access to its network to fast data provider Lloyd Group - took 15 months. Other investigations in non-telecommunications areas have taken ages.

Aside from complexity, such tardiness may also reflect the commission's resourcing. And, as one telco executive quipped, maybe its service might improve if it were no longer a monopoly.

Whatever, its timing will do Clear Communications no harm in its interconnections negotiations now in train with Telecom. The just-completed agreement between Telecom and Telstra Saturn did away with local interconnection payments for both internet and voice calling.

If Clear is to forego internet payments, possibly worth $25 million a year, it will focus on the amount it must pay Telecom for the "last mile" connection between Clear's residential long distance customers and Clear's network. It is not cheap: 2.8c a minute in each locality, resulting in Clear paying Telecom something in excess of $70 million for interconnection.

The commission's action may give Clear another bargaining chip: that it could piggyback on the commission's efforts to seek damages for lost internet termination traffic, all at a time when the final report of the telecommunications inquiry has yet to come.

It's a possibility, but not an entirely engaging one for either Telecom or Clear. Nevertheless, it will be in the back of everyones' minds when gritty matters are being negotiated.