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Networks Chief challenges 0867 justification

An informed analysis of the telecommunications network shows the 0867 local Internet number range is about thwarting competition, not about managing network load, says CLEAR Communications.

Ken Benson, CLEAR's Networks Director and formerly Telecom's Group General Manager, Network, said the justification for 0867 offered by Telecom at a press briefing was disingenuous at best.

"We're asked to accept that 0867 is designed to protect the network by restricting Internet calls at times of outages and emergencies," said Mr Benson. "Even if you accept that assertion, anyone who understands Telecom's network knows that there are far better ways of managing demand.

"If protecting the network was the real issue, Telecom could divert Internet traffic at the local exchange and pass it via dedicated trunk lines to either the Internet Service Provider (ISP) or another carrier."

Mr Benson noted that Telecom's justification for 0867 had shifted from the original explanation, which was that it was required to protect 111 calls. "That was quickly proven to be falacious, too, because 111 calls have their own dedicated trunk capacity, quite separate from the trunk lines used for ISP and voice calls. The use of 0867 is also likely to cause more repeat call attempts, increase congestion at the local exchange and therefore put 111 calls at greater risk.

"New Zealand isn't unique in experiencing huge increases in Internet traffic. But we are unique in Telecom's unilateral mandating of 0867. No other major telecommunications company in the world manages its traffic in this way, and indeed in most countries it would be considered anti-competitive.

"If you look at best practice in virtually any country with a competitive local calling market, the solution is realistic investment to meet customer demand. Again, if network management was the real issue, that's the approach we would expect here."

Mr Benson also said the 0867 number range did not apply to Telecom's own ISP, Xtra, and it didn't apply to business customers. "If the real object was to manage local Internet calls, wouldn't you expect 0867 to apply to all Internet users?"

Mr Benson said the effect, and almost certainly the strategic aim, of 0867 was to sidestep interconnection payments to CLEAR, which had recently built up a significant wholesale ISP service. "That means Telecom can close the door on a growing revenue stream for a competitor. It wouldn't be possible in a competitive market and it shouldn't be tolerated here," he said.

"The most important issue is that the Internet is now essential to the country's economic future. We think access to the Internet is simply too important to hand over to the control of any one company."

Editor's note: Ken Benson was formerly Group General Manager, Network for Telecom New Zealand. Between 1996 and 1998 he headed the Network team of 1700 staff and 250 contractors and was responsible for the entire Telecom Network Business of Fixed, International, Broadband and Mobile. He left the company in 1998 and joined CLEAR Communications in February 1999.

ENDS

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