Telco deadlock stinging users

By PETER GRIFFIN

A network dispute between the country's biggest telecommunications providers Telecom and TelstraClear is threatening TelstraClear's lucrative call centre servicing business and potentially blocking the carrier's customers from making emergency calls.

The Telecommunications Users Association yesterday wrote to the chief executives of both telcos urging them to sort out the long-running dispute in the interests of customers and public safety.

"We're outraged that users are getting involved in their internal politics," said association chief executive Ernie Newman, who pointed to the unresolved dispute as another sign that Telecom is increasing pressure against growing competition from the $435 million merger last year of Clear and TelstraSaturn.

In the past few months Telecom has been aggressively defending its patch - against the spirit of the widely praised new regulatory regime, set in place by the passing of the Telecommunications Act just before Christmas.

No progress has been made on renegotiating an interconnect deal between Telecom and Clear that lapsed in September, despite Clear trying to extend a $57.6 million olive branch to Telecom to settle the row.

Telecom's move in the New Year to raise prices, netting an extra $25 million a year, and a decision to impose backdated charges on some internet service providers who resell its services have drawn criticism.

So has the telco's firm stand on the future shape of the telecoms industry forum. Telecom is pushing for the body to settle decisions by consensus vote - effectively giving each member the power of veto.

Smaller ISPs and telcos say that then nothing would ever be agreed.

In December, Telecom wrote to its major competitors advising they would be expected to fork out at least $36 million to cover losses Telecom claims it makes complying with its national service obligations under the Kiwi Share. Some rival telcos and ISPs dispute whether Telecom makes a loss on providing the services at all.

In the latest dispute to bubble over, the two carriers are locked in disagreement over terms on which Telecom will supply TelstraClear with access to "links" between their networks - bandwidth connections that provide much-needed call capacity for users making 0800 toll-free calls to call centres serviced by TelstraClear.

Customers from either network trying to ring through to call centres from the South Island have been unable to get through at busy periods during the day,

The Business Herald understands that one dissatisfied customer - worth $30,000 per month to TelstraClear - is now on the verge of dropping the carrier's services.

TelstraClear's head of business development and regulatory affairs, Kevin Millar, said Clear Communications had requested extra bandwidth capacity from Telecom as far back as last July when an interconnect agreement between the carriers was still active.

Wrangling over contract terms has prevented the capacity from being delivered. A lack of communication between the carriers has compounded the problem.

"Telecom is not permitting customers' calls to pass across the network," said Mr Millar.

"[And] There are cases when 111 calls won't get through. It's a situation we abhor being in."

He said the links could be activated and the problem solved in just half an hour - if the two parties could come to the table.

But Martin Freeth of Telecom said TelstraClear had done an about-turn on the conditions of a deal.

"Until two weeks ago we thought we had an agreement about how those links were to be configured [and paid for] on a commercial split model.

"That's the model we had been working to with TelstraSaturn."

Mr Freeth said the agreement would split the cost of the links between the carriers to "make it easier to separate who should pay what for what type of traffic."

He said that Telecom had provided five dedicated capacity links for emergency calls originating from TelstraClear customers.

"We understand [Telstra]Clear hasn't completed testing of those dedicated links and hasn't started commissioning them."

Mr Newman said wholesaling with other carriers would be a key part of the new telecoms environment and Telecom would have to get used to that.

Douglas Webb, the new telecommunications commissioner, is due to enter the fray next month.

TelstraSaturn's interconnect agreement with Telecom also expires soon, which will probably mean that intensive negotiations will be rolled into one.