Telecom and Clear strike peace pact on 0867

In what appears to signal a new era of dialogue, Telecom and Clear have announced an agreement scrapping the two cents per minute charge for non-0867 Internet calls.

In what appears to signal a new era of dialogue, Telecom and Clear have announced an agreement scrapping the two cents per minute charge for non-0867 Internet calls.

The form of the agreement - which lasts for three and a half months and is intended as a stopgap until the two carriers can renegotiate their interconnection agreement - is that proposed by Clear CEO Tim Cullinane when he triggered talks with Telecom recently.

Key points of the agreement are:

• Internet users will no longer be charged two-cents per minute for non-0867 Internet calls.

• Clear will "encourage" its dial-up Internet customers to begin using 0867

numbers.

• Clear and Telecom will sign an agreement whereby Clear will provide

Internet access services under an 0867 agreement, initially until the end

of August.

• Clear will withdraw its application for an interim injunction requiring Telecom to honour the terms of the number portability agreement between the two companies.

• Telecom will not appeal against the interim injunction granted to i4free

last month.

What the two companies have not announced is the terms of their deal on 0867 - and in particular whether calls from Telecom's network to Clear's will attract a per-minute charge. This will have implications for i4free, which still relies on a share of the net 1.5 cents a minute Clear has been receiving from Telecom for dial-up calls to i4free. The system devised by i4free, which sees calls to an assigned 0867 number diverted to a Telecom number associated with Clear via number portability, would appear to be irrelevant now.

Clear has also been relying on interconnect revenue to fund its Zfree offshoot, which has been hosted on non-0867 dial-ups - meaning its customers struck a two cents per minute charge after 10 hours a month.

Clear continues to talk up the growth of free ISP services in other countries, but invariably cites examples in countries with per-minute metering on telephone calls, where the cost of Internet services can be built into call charges - and where the charges provide a cap on usage. The viability of the free model in a small market with free local calling is far from proven.

The temporary agreement caps off a brilliant strategic campaign by Clear. The use of i4free as a stalking horse and its subsequent success in court put Telecom where it rarely was during the court battles of the 1990s - on the back foot. The looming ministerial inquiry into telecommunications and the new culture at the top of Telecom under CEO Theresa Gattung have also played a part.

Gattung told National Radio this morning that the pact with Clear represented "a very mutual and genuine desire to put the past behind us."

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