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Commission to examine undersea cable pact

The Commerce Commission has reiterated it will look into the "potential anti-competition issues" posed by Telecom, Vodafone and Telstra's proposal to lay a $71 million communications cable between Australia and New Zealand.
That is despite not yet having received any formal complaints from other companies about the possible downstream impacts on the retail broadband market.
Communications Minister Amy Adams greeted the Tasman Global Access cable as "the market solution that the Government always expected would happen" when the surprise initiative was announced last month, but says the commission would be doing its job by looking at the venture and she had no concerns.
The commission had a broad mandate and "I don't think they have signalled anything more than they could have a look at it potentially", she says.
CallPlus chief executive Mark Callander said last month that CallPlus intends to raise concerns with the commission, but it does yet appear to have followed through.
It is understood the agreement between Telecom, Vodafone and Telstra has not yet progressed beyond a memorandum of understanding to lay the cable, which would provide an alternative transit route to the Telecom half-owned Southern Cross Cable for internet traffic to and from New Zealand and the rest of the world.
A commission spokeswoman says it would be interested in the terms of any contracts between the firms, but it understood these had not yet been drawn up. "The parties involved will brief the commission once these details are available," she says.
The three investors would carve up all the capacity on the fibre-optic cable between themselves, in proportion to their individual financial contribution. Telecom has said it is too early to comment whether, and on what terms, it might wholesale any of its share to rival internet providers.
Vodafone chief executive Russell Stanners says he would be happy with any regulatory scrutiny of the investment.
"The fact of the matter is there is a need to be solved from a national point of view, and it will be a competitor to the Southern Cross Cable. My own view is there is one cable, and with this there will be two. I don't know what particular concerns [the commission] would have."
Telecom chief executive Simon Moutter had been the instigator of the initiative, Stanners said. "He rang me up and said 'I think this makes sense'."
The Telecommunications Users Association has expressed the reservation that the TGA cable would undermine any business case for a new cable direct to the US in competition to Southern Cross.
Southern Cross Cable marketing manager Ross Pfeffer says the Southern Cross cable network was expected to remain in service until at least 2025 and he did not believe the TGA cable would significantly undermine the business case for its renewal.

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