Published on the 17/10/2011 | Written by Newsdesk
Telecom will pay rivals $31.6 million to resolve allegations of discrimination under the Telecom Separation Undertakings…
The Commerce Commission launched legal proceedings against Telecom in May, following an investigation into the company’s failure to provide Unbundled Bitstream Access (UBA) service with Sub-loop Unbundling (SLU) and the Sub-loop Extension Service (SLES) to competitors when the company was providing such a service to its own retail arm, in breach of Telecom Separation Undertakings, the rules which govern the behaviour of the near-monopoly business.
The UBA/SLES service was intended to allow other telecommunications companies to provide their own voice services from their exchange based equipment in conjunction with a Telecom broadband service from a roadside cabinet. The Commission considered that Telecom’s failure to provide this service to other telecommunications companies, while providing it to its own retail business, caused serious harm to competition in telecommunications markets, reduced the extent of local loop unbundling, and resulted in significant commercial gain to Telecom.
“It is in everyone’s interests that we settle this regulatory issue prior to demerger,” said Telecom CEO Paul Reynolds in a prepared statement.
“Settlement with the Commission and industry will allow all parties to move forward as we transition to the new regulatory environment and a new industry structure”.
Telecom does not accept that it breached the Undertakings, but recognises that the Commission and some of Telecom’s wholesale customers have differing views.
“We do acknowledge that Telecom failed to meet expectations that a UBA service would be provided with SLES in a timely manner. We are now in the process of rolling out a UBA service to work with access seeker voice.”
The $31.6 million settlement means that Telecom has returned its commercial gain through the compensation it has agreed to pay to telecommunications companies Vodafone, Orcon, CallPlus, Compass and Airnet, said Dr Patterson, Telecommunications Commissioner.
“This will enable these companies to invest further in local loop unbundling and provide competitive services to consumers,” he said.
“We are pleased that Telecom has worked constructively with the Commission to reach a settlement which has avoided lengthy and expensive litigation, and resolved the matter prior to structural separation coming into effect”.
