Telecom's bad-boy division in more CommComm trouble

The investigation will assess whether Telecom Wholesale is likely to have discriminated against telecommunications providers such as Vodafone and Callplus in favour of Telecom Retail.

This is not the first time the bad-boy division has been in trouble. In July, Telecom Wholesale paid $1.6 million to settle a case brought by the Commerce Commission alleging its “loyalty offer” meant independent operators who did not commit to lengthy wholesale contracts, instead preferring to install their own broadband gear in Telecom exchanges, were charged more.

Split personalityThe previous government split Telecom into three organisationally split divisions: Chorus (which looks after the Telecom network), Telecom Wholesale (which sell access to that network to all-comer – from Telecom Broadband to the likes of Vodafone, Orcon and CallPlus – on an equal basis) and Telecom’s retail and corporate operations.

The “Undertakings” are the rules that govern operational separation (which could soon be superseded by full structural separation, whether or not Telecom wins Crown fibre business.

In January, Callplus, state-owned Kordia, Orcon (owned by Kordia) and Vodafone NZ wrote to the commission asking for clarification of Telecom Wholesale’s pricing of so-called UBA (unbundled bitstream access or wholesale broadband) at the roadside cabinet level when combined with a wholesale voice call service offered from Telecom exchanges.

WeekEarlier this week

Second knockback in a weekEarlier this week, Telecom received a knock-back when Communications Minister Steven Joyce rebuffed changes that the company asked for changes to its organizational sepration Undertakings, including the suspension of some customers to a VoIP (internet calling) over copper service. Mr Joyce allowed only a few months delay, and watered down other requests.

Telecom had argued that a lot of its investment in new Telecom Wholesale systems would be wasted given that the industry will dramatically restructure once the government's $1.35 billion ultrafast broadband (UFB) Crown fibre initiative gets underway.