ComCom sues Telecom Wholesale on alleged obligation breaches
The Commerce Commission is suing Telecom Wholesale for allegedly breaching its obligations under the Telecom Separation Undertakings and discriminating between service providers, it was announced this morning.
Read also: Telecom to remove loyalty offer as soon as possible
The commission said three separate loyalty offers made by Telecom Wholesale's business unit between December 2008 and July 2009 may have breached its obligations under the Telecom Separation Undertakings.
The commission said the alleged breaches have the potential to seriously harm competition in the telecommunication market and undermine efficient investment in telecommunications infrastructure.
Proceedings against Telecom have been filed in the High Court to seek remedial orders and/or penalties against the company in relation to loyalty offers.
The commission’s investigation follows on from the Independent Oversight Group's findings, which revealed it believed Telecom Wholesale's loyal offers had breached undertakings.
The commission confirmed it had also received complaints on the matter.
Telecom chief executive Paul Reynolds had harsh words for the watchdog at the company's quarterly results briefing this morning. "Months ago, we asked the commission for guidance on the structure of our [loyalty] pricing and didn’t get any. So we’re disappointed they’re taking legal action. But that’s there choice," Dr Reynolds said. Telecom spokesperson
Mark Watts said the company would further address the matter during a web cast (click here) at 10am this morning.
Last month, The commission won the right to challenge a Court of Appeal verdict that said Telecom did not abuse its dominant market position with a controversial dial-up internet surcharge.
In August NBR reported if Telecom is found guilty of alleged breaches under its separation undertakings, it could face a maximum fine of $10 million or $500,000 a day until it corrects the situation.
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Comments and questions2
Brilliant. Bravo Commerce Commission. Telcom have a long history of cheating and/or lying to make money. They would never have survived if they hadn't enjoyed such an extended monopoly status. Now they will fight every motion to make it a fair playing field.
How dare its CEO be paid so highly for 'meeting targets'-you mean complying with regulations is to be rewarded? They have shocking levels of customer service and employee engagement. Their return to stakeholders is appalling. And their products are confused, slow, riddled with system problems and (still) overpriced.
And once more with feeling: Real leadership- say someone like Air NZ's Rob Fyfe takes a pay cut of 20 percent during this recessionary period - not to mention being visible, honest and fairminded. A far cry from the TCom executive team who pay themselves more to cheat and hide within a culture of blame, deception and apathy.
Working there will drain your life whilst using their super network (yeah right) is a choice to plunder our economy of everything good. Bellsouth had a better network 15 years ago. These nimrods are a joke. Sharholders sack 'em and break it to bits.
The other players are more than good enough to pick up the pieces.
Cocom suing Telecom? I think the correct description would be that the commerce commission has issued proceedings against telecom for an alledged breach - any financial penalty that may result is up to the courts to decided, and will be in the form of a "fine" not compensation to the commission - hence Telecom is not being "sued" by anyone.
Likewise, the commission didn't win the right to appeal againt the court of appeal decision that went in favour of Telecom in relation to the introduction of 087 for dial up services. Appealing against a decision is not a contest involving winners or losers, there is no right to bid for - the commission simply had to decide whether or not to appeal. I would speculate that having been knocked back twice now by the high court and court of appeal its obligated to exhaust all legal means and avenues. Giving up now would be an admission that its judgement and/or management of proceeding against Telecom were in error yet again (the commission is no stranger to being ruled against by the supreme court).
So if the Commerce Commission is the governments watchdog, who's watching the commission?
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