Telecom questions Com Com’s 'million dollar' Supreme Court appeal

Telecom says it is disappointed with the Commerce Commission’s decision to appeal the 0867 case to the Supreme Court, given the “millions of taxpayers’ and shareholders’ dollars already spent on pursuing an historical case based on old legislation”.

Read also: Commerce Commission itching to test market power law - but it has picked the wrong case

The 0867 dispute saw Telecom instigate special fees for customers to head off Zfree (owned by Clear), i4free (owned by Annette Presley and the recently re-engaged Malcolm Dick) and other ISPs that offered free dial-up internet, making their money through voice-only era interconnection agreements that saw the dominant telco pay them every time one of their customers logged on.

During the case’s grinding progress, both the High Court and the Court of Appeal have found in Telecom’s favour.

“The actions at the centre of the 0867 case happened a decade ago, when the telecommunications landscape was vastly different and the exponential growth of internet traffic took most people by surprise,” said Telecom said Group General Counsel Tristan Gilbertson in a statement.

Telecom says it is clear that the commission is seeking a law change to Section 36 of the Commerce Act (1986). 

The key element at issue is the so-called counterfactual test of market power - refined by a Privy Council ruling in 2004 - which calls on the court to decide if a hypothetical company without monopoly power would have acted in the same manner as a dominant player accused of exploiting its position.

“If that’s what the commission wants, then the most efficient and least costly approach is to seek legislative change, rather than change through the courts in a case over ten years old.”

Telecom claims the Supreme Court appeal will cost taxpayers, and its shareholders, more than a million dollars.

“If the commission now wishes to participate in an open and transparent policy debate, with a view to having the relevant legislation changed by Parliament, then Telecom looks forward to contributing its perspectives,” said Mr Gilbertson.

The Australian government recently introduced four new criteria to a similar market power law, but they have yet to be tested in court.