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Commerce Commission looks into alleged Telecom breach

Friday 15th October 2010 1 Comment

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The Commerce Commission has launched an investigation into whether Telecom's wholesale unit discriminated against its retail rivals, breaching the terms of its operational separation.

The regulator said its concerns came from the price Telecom Retail paid for unbundled bitstream access (UBA) on Chorus' sub-loop extension service (SLES) compared to the company's rivals. UBA gives telecommunications companies the ability to supply broadband services without needing their own copper network, while SLES is a service provided by Telecom's network company to supply services on the cabinet-based UBA system.

"Earlier this year concerns were raised with the commission about the price Telecom requested for the UBA service to be supplied in conjunction with SLES," said Telecommunications Commissioner Ross Patterson in a statement.

When advised of the complaints, "Telecom responded that it did not believe that Telecom Wholesale was in any way in breach of its non-discrimination obligations".

In July, Telecom agreed to pay $1.7 million to its rivals and the regulator after reaching a settlement of a wholesale loyalty offer that was bound for the High Court. Had the phone company lost, it faced fines of up to $10 million for each breach.

The regulator has written to Vodafone New Zealand, Kordia, and CallPlus and asked them to provide any correspondence with Telecom over the services. According to the letters, published on the regulator's website, Vodafone has already provided a record of its correspondence with Telecom dating back to March last year.

Telecom's shares climbed 3% to $2.08 in trading yesterday.

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Comments from our readers

On 16 October 2010 at 3:32 pm brian said:
Heaven forbid do C.C have tunnel vision or is it that telecom is an easy target. Do they have any business experience at all when their personal money is at stake. The only reason for being in business is to make money and to do so it is necessary to make a profit. Good by newzealand and hullo overseas.
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