Determination On Interconnection Prices

Telecom Applies For Determination On Interconnection Prices

Telecom New Zealand is applying to the Telecommunications Commissioner for price determination on interconnection between carriers following the breakdown of negotiations with TelstraClear.

Chief Operating Officer, New Zealand, Simon Moutter said Telecom was intent on seeing sensible and fair prices in New Zealand for interconnection and for the wholesaling of telecommunications services.

“We are making progress with TelstraClear in negotiations on wholesale prices within the framework created by the Telecommunications Act,” Mr Moutter said.

“But on interconnection, TelstraClear is just mucking around. We’ve shown plenty of negotiating flexibility and tabled various proposals. In response, TelstraClear keeps changing its stance on the whole process of negotiation.”

Mr Moutter said all the issues around interconnection pricing were being teased out in a comprehensive Commerce Commission conference this week. “The Commissioner is well positioned to apply his sound thinking to our stalled negotiations with TelstraClear.

“We’re in no doubt that he can help the industry achieve the sensible and fair, interconnection pricing that it needs,” Mr Moutter said. “In Telecom’s view, such pricing is a critical ingredient in an environment that encourages ongoing investment in telecommunications infrastructure for New Zealand.”

He said Telecom was confident that the standard toll bypass interconnection rate of 2.6 cents per minute was reasonable and this has been demonstrated through rigorous international benchmarking. “Even so, we’ve been trying hard to negotiate new prices under that level.

“We will ask the regulator to step in partly because we are fed up with TelstraClear’s poor behaviour on interconnection matters. For one thing, this company currently owes Telecom around $40 million for services already received from us,” Mr Moutter said.

“More than anything, we look to the Commissioner to make a valuable contribution on interconnection pricing while, at the same time, helping clear the decks for Telecom and TelstraClear to get on with agreement on wholesale pricing, sooner rather than later.

“We’re turning to the regulator also because we understand just how Telstra, the large Australian parent of TelstraClear, tends to operate on pricing issues with other carriers,” Mr Moutter said. “It took AAPT nearly five years to obtain an agreement with Telstra in Australia. Frankly, we want to do things the New Zealand way and that means involving the Commissioner where this can produce pricing sensible and fair to everyone.”

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