ISPs seek legal block to Telecom's broadband plans

The Commerce Commission is reviewing a number of complaints laid by competitors

CallPlus is calling on the Commerce Commission to move swiftly to stop Telecom introducing its new broadband pricing regime, due to take effect from October 26.

The chief executive of CallPlus, Martin Wylie, says the Commerce Commission needs to stop Telecom before the plans are released into the market.

“We have asked the commission to intervene and to injunct Telecom if needs be.” Wylie believes the new plans are so disruptive to the industry that they must be stopped before the public gets their hands on them.

“In the short term there’s good news there for customers but in the long term it’s the same crap as before.”

The new Xtra plans have come under fire for pricing, which in some cases is below the wholesale price the ISPs must pay Telecom, for the lack of consultation and for the inequality in provisioning which sees Xtra customers treated differently to non-Xtra customers.

As Computerworld has reported, Xtra receives its bandwidth over Ethernet connections while the rest of the industry uses ATM – a far more costly solution.

Wylie says the problem goes beyond that, however.

“Xtra customers are connected in days, while it takes weeks to connect ours. On top of that, Telecom has some kind of technical problem it cannot fix which causes micro-outages that drop our customers and forces them to re-authenticate to get back on the network.” A number of customers have reported problems logging back on and Wylie says it’s possibly due to the sheer overwhelming number of customers trying at once.

”It can affect hundreds if not thousands at a time and they simply can’t log back on.”

Wylie says the problem only affects non-Xtra customers and that Telecom “doesn’t seem to be in any rush” to fix it.

“If that’s not an abuse of monopoly position, I don’t know what is.”

However, Telecom's general manager of wholesale, Matt Crockett, says the company "is playing fair".

"The regulated price of $28.04 is set by the Telecommunications Commissioner. Telecom’s lowest retail price in the market is $29.95 — and that is based on a $39.95 retail plan with a $10 discount for customers who have both phone calling and broadband with us". However, the $28.04 price is excluding GST while the $29.95 price is including GST.

Crockett says the regulated price is an average across the whole range, rather than a specific price for a specific plan.

“Providers have many different plans. Because they are dealing with an average wholesale price, the margin for them won’t be on the low priced entry-level plan but on the higher priced advanced plans."

Wylie says when the problems with Telecom's service and the new price, and the low aggregate traffic limit — 4GB per customer per month — ISPs that offer a service to match Xtra's will end up paying Telecom far more than the wholesale rate quoted.

The Commerce Commission declined to comment late yesterday, except to say it had received a number of complaints and was reviewing them. No timetable for resolution was given. Typically the commission will review a complaint to see if it warrants a full-scale investigation before looking into the matter in depth.

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