CallPlus applied for a determination on its interconnection pricing with Telecom after privately being offered a rate 10% more expensive than the one set by telecommunications commissioner Douglas Webb last year.
CallPlus executive director Malcolm Dick says CallPlus would rather go through the process of seeking a determination than settle for that, "because it's an important long-term principle that you can't be 10% worse off than a competitor".
Dick says CallPlus is also seeking a determination on the national transport, or long term interconnection rate, as opposed to the local rate that the commissioner set for Telecom and TelstraClear.
"Telecom claims [the long term rate] isn't covered under the act, due to a loophole and they want to charge 7c per minute, up from 4.5-5c now."
He says commissioner Webb "has said he'll accept our application and that he'll rule on the long term interconnect".
CallPlus believes the act does cover the long term rate, he says.
"Obviously it's not black and white - if it was, the commissioner would have said 'it's not covered'.
"We believe it is covered and in every other telecoms regulatory body around the world, its covered. To not cover it would put New Zealand out of kilter with the rest of the world."
CallPlus has sought determinations both on interconnection and wholesaling and, following his decision with TelstraClear's application, commissioner Webb has decided to assess the two separately, tackling interconnection first.
Telecom government relations manager Bruce Parkes confirms Telecom has made interconnection offers to CallPlus.
"I can't remember whether it was 10% or 5%, but we've made offers to CallPlus in the past reflecting the relative volumes carried by TelstraClear and CallPlus.
"The ratio is about 20:1 and it's not an uncommon business model to have a cheaper price for customers that purchase a large volume.
"There are economies of scale in telecommunications and we reflected that in our offer."
The price set by Webb last year was specific to Telecom and TelstraClear and not intended as a generic price for the industry, he says.
As for national interconnection, Parkes says the Telecommunications Act clearly defines it as referring to local switches.
"It's a mystery how CallPlus can make an argument that under the act, it's an obligation for Telecom to provide interconnection from Invercargill to Auckland.
"That's not interconnection as defined by the act or by anyone - the act defines it as interconnection with the fixed PSTN up to the local switch."
There is no need for carriage of calls between cities to be regulated, he says, because it's a competitive field.
"TelstraClear has its own network running between the major cities and BCL provides that service in some instances.
"Telecom has less than 50% of all toll traffic."
As for Dick's complaint that Telecom wants to raise its national interconnection charge to 7c per minute, Parkes says he's not familiar with all the figures relating to that situation, but "we have tabled a price as part of a package of services".
The fact national carriage is a competitive field means if someone doesn't like the price or package offered, the can go elsewhere, he says.
"Offers we make to carriers are part of a bundle of services and price is only one part."