Supreme Court rules on decade-old Telecom, ComCom dispute
The Supreme Court has nailed shut a long-running dispute over a controversial dial-up internet surcharge used during the 1990s.
The Commerce Commission has, since 1999, sought to bring Telecom to task for its 0867 dial code package, which it claimed was a prohibited use of Telecom’s dominant market position.
The High Court and Court of Appeal both ruled in Telecom’s favour – and the Supreme Court today upheld that decision.
It found that the commission was unable to show that Telecom acted as a dominant firm when it brought in the 0867 package.
Rather, Telecom was able to show that any firm acting competitively, dominant or not, would have introduced a scheme similar to the 0867 package.
The commission was ordered to pay Telecom $50,000 in costs.
The use of a hypothetical competitive market to decide the case is an approach used previously by the Privy Council and High Court of Australia.
“It is important that the approach to the issue ... be broadly the same on both sides of the Tasman,” the Supreme Court judges said in their decision.
On the bench for the case were Chief Justice Sian Elias and Justices Peter Blanchard, Andrew Tipping, John McGrath and Noel Anderson.
More on the long-running spat – and historical oddity 0867 – can be found here.
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Comments and questions8
To produce such a consistent and clear verdict that is so absolutely contrary to natural justice is a farce and the Commerce Act needs to be revisited to address this kind of nonsense.
0867 was brought in for one reason only - to allow Telecom to avoid paying Clear its interconnect fees. That Telecom would go to such lengths to avoid paying $14m to a competitor speaks volumes about the state of the so-called competitive market both in 1999 and since.
Our current telco market is based in large part on the ripple effects stemming from this decision. Every regulatory decision made since has been built around Telecom's claims in the 0867 case - that the internet radically changed the kiwi share agreement, that Telecom must be compensated for the kiwi share, that free local calls cost the company millions a year, that new line connections should be paid for by the customer not the company... and so on.
This is a sham. Rodney Hide, you're the minister responsible for the ComCom - please urgently review this utter shambles.
This is the correct decision. Telecom was acting correctly to protect their network.
The culprit here is the Commerce Commission for a foolhardy waste of millions of dollars of taxpayer's money.
If you read the decision, the Court says clearly that Telecom was acting to prevent Clear exploiting the interconnection agreement through arbitrage, and that anyone else in the same situation would have done the same thing. This whole thing has been a complete waste of taxpayers money. Heads should roll at the Commission.
It's not that law that's an ass here
That came later - Telecom introduced 0867 and then Clear went to town with i4free, zfree and the rest of them. Telecom might like you think otherwise but sadly the leopard has not changed its spots.
Telecom was due to pay Clear under its interconnect agreement for the first time ever. Theresa Gattung decided not to pay and trumped up some utter nonsense about protecting the network to defend the indefensible.
You might also recall that Callplus/Slingshot took Telecom to court over it. That case was settled years ago - about ten minutes after CP's lawyers told Telecom's lawyers just how deep the discovery process would go. Once they demanded TG's emails on the subject the decision to settle was pretty swift in coming. Malcolm Dick won't be able to say a word but he drives a Bentley off the back of that settlement.
Dr Paul, PhD fly fishing, is on a roll.
He and his team were last week awarded (I use the term loosely, of course) the honour of being perceived as the worst company, not only in NZ....but the whole of Australasia.
Not bad for Gattung 2 + $2-mil.
What a prince we got. He claims a "passion for customers" and aims {surely not in our lifetimes? (Ed)] "to make Telecom the most customer-focused company in NZ"....in the latest annual report, under his photo.
He's off to a great start: makes customers pay the postage now....and has begun IMPOSING $11 a MONTH FINES....for anything Telecom decides (yes, THEY decide) is "late"....undefined.
A neat little earner to go towards the next $mil bonus for the Brogue Rogue.
Wake up to this conman Kiwis!!!!!! Enough's enough: surely.
You guys can rant and rave all you want but the court did its job and found the facts and applied the law to them. That's what courts do. I put more faith in the court's impartial and objective determination of the history of this thing than any of the angry and venomous assertions I've read here. Get some therapy. Deal with your anger issues. Stop blaming Telecom for everything under the sun. It's tired and old and really boring.
I believe the verdict that was found was the correct one. Telecom went to measures to block a loophole that allowed another company to effectively "SCAM" money from their network.
It's Telecom's network, but they have to obey the laws as does anyone else and by providing free local calling is part of it. However when Telecom had to pay to connect to another network that is not justified.
Why not take the government to court for filling in tax loopholes? It is effectively the same thing.
Clear was taking advantage and lost, it does not matter that Telecom is/was bigger than the rest. The little guy was taking advantage of good will.
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