Final decision on interconnection delayed

The Commerce Commission has delayed its decision on the interconnection dispute between Telecom and TelstraClear. However, its draft determination indicates Telecom's interconnection charges could be almost halved in price.

The Commerce Commission has delayed its decision on the interconnection dispute between Telecom and TelstraClear. However, its draft determination indicates Telecom's interconnection charges could be almost halved in price.

The commission was asked by telcos to sort out the interconnection dispute. It has 50 days to release its decision, but yesterday announced that despite making “reasonable efforts” it was unable to meet that deadline.

It advised the parties of that last week and says in its draft determination that it will make a decision “as soon as practicable”.

Both Telecom and TelstraClear have issued statements saying they are happy with the commission's draft ruling.

TelstraClear's announcement focused on the suggested cost range of 1.21 to 1.42 cents per minute, which is less than it is currently paying Telecom.

Chief executive Rosemary Howard says the price "is a promising development compared to the 2.6 cents per minute proposed by Telecom".

“Although the proposed price range is still towards the higher end of what TelstraClear believes are comparable rates charged internationally, it serves to illustrate how out-of-step historic charges have been".

Telecom's government and industry relations general manager, Bruce Parkes. says: "Naturally, there are parts of the determination that we disagree with but there are others which we think are sensible.”

The draft ruling, designed to spur the telcos to give the commission more information on various aspects of the interconnection agreement, has recommended different pricing structures for voice and data calls.

It says voice calls should be billed in a "forward looking cost-based” (FLCB) approach which would see a cap placed on the costs of the call being passed on from the telco that owned the lines, to the customer's telco. However, FLCB is not considered ideal for calls to ISPs as the call is typically much longer. The commission has a preliminary preference that would see telcos recovering their termination costs from the ISP rather than from each other. This is known as “bill and keep”.

However, the commission might reassess that view after responses to the draft determination on the appropriate length for a call cap and feasibility of distinguishing between voice and data calls.

Both companies will be making more submissions on the issue.

Ernie Newman, chief executive of the Telecommunications Users Association (TUANZ) welcomes any move that will lower the price of interconnection and thus the price of calls for the end user.

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