Bring it on, says Clear chief

Having out-thought and out-foxed Telecom in recent weeks, Clear has maintained the initiative by kicking off the formal re-negotiation of the two companies' interconnection agreement.

Having out-thought and out-foxed Telecom in recent weeks, Clear has maintained the initiative by kicking off the formal re-negotiation of the two companies' interconnection agreement.

The original 1996 agreement must be renegotiated by the end of this year, and recently entered a period during which either party could trigger talks. Clear CEO Tim Cullinane has not only set off the process, but suggested the shape of a likely deal.

In a letter to Telecom CEO Theresa Gattung, Cullinane, noting that the current Ministerial Inquiry into Telecommunications "has the potential to significantly influence the competitive environment" proposed a new agreement which could either be amended or would be of short duration.

Cullinane's call for a "telecommunications agreement for the new millennium" may have some attraction for Telecom as a way to demonstrate goodwill while the inquiry is in progress, and to extract itself from the mess its 0867 initiative has become.

Where Telecom spent much of the 1990s happy to forestall any change in the status quo by staying in court, the shoe is on the other foot in the new millennium. A High Court judge recently decided that the controversial use of the 0867 system by Clear and its customer the free ISP i4free - which is proving both inconvenient and costly for Telecom - should prevail until a substantive hearing later in the year.

Clear would without doubt be seeking a better deal on 0867 than it has thus far been offered.

But any new deal that does away with the stiff per-minute interconnection rates imposed in the current document it will have implications for ISPs - i4free and Clear's own Zfree - that depend on interconnect payments from Telecom for revenue.

Cullinane says Clear will push for a new agreement "that promotes the growth of Internet and other IP-based forms of communication alongside conventional traffic, and encourages choice for customers.

"Triggering the interconnection agreement re-negotiation is the first step in reshaping one of the foundations of telecommunications in New Zealand. The current agreement has a massive influence on customer outcomes. It's very important for all telecommunications users that the new agreement really opens the door to more choice, more innovation and better prices.

"We've said for some time that the current agreement is one-sided and has the effect of limiting competition. This is to the detriment of the consumer," said Cullinane. "Telecom itself has also recently criticised parts of the agreement. So we think it is time to put all this aside and to work towards a new agreement."

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