Justice Geoffrey Venning is due to rule on the Vodafone v. Telecom dispute at midday ... unless the two telcos can strike a last-minute deal. NBR's technology editor Chris Keall rates the odds.

[UPDATE: Vodafone and Telecom announced a settlement this morning.]

Yesterday, both sides’ lawyers did have very open channels of communication.

When one had gaps in their submission – usually revolving around technical definitions, as both sides had pulled together their cases at very short notice – the other would invariably help out.

Obviously, in terms of a possible last-minute deal, it helps that both sides’ legal teams are working closely.

During breaks, various Telecom and Vodafone staffers stood apart, and neither side spoke to the other - which was pretty much to be expected.

Telecom chief executive Paul Reynolds, briefly in attendance, had dropped his smack-talk about Vodafone (whom he labelled “desperate” on Monday). But his silence was more indicative of the fact Justice Venning had reportedly warned both sides against talking to the media rather than any rapprochement between the two carriers.

This morning, Telecom won't confirm or deny if overnight talks took place. Nevertheless, there are two factors that mitigate in favour of a settlement, both of which would likely have drawn the two telcos to the table:

1. Neither side landed a killer blow in court yesterday (read the blow-by-blow here). Vodafone did a good job of illustrating that XT has caused interference, including the indignity of admitting it was losing customers. However, Telecom was able to trot out an April 9 MED letter (about testing originally carried out at NZ Comms’ request) saying XT was within guidelines about stray emissions, which both sides agree are a fact of life. Telecom’s lawyers were not able to effectively rebut Vodafone’s argument that XT is only at around 15% power, and interference is going to get five to eight times worse after it’s powered-up higher from launch next week. However, the Radiocommunications Act (1989), which Vodafone alleges Telecom is breaking, seems vague in its definition of “harmful emissions” (those that go beyond the expected “unwanted emissions”), and to want degree the transmitting network and the receiving network are responsible for isolating themselves. Both sides struggled at times to tie various strands of their very modern mobile dispute to specific sections of an act that predates the cellphone era.

2. Telecom has already reached an out-of-court settlement with NZ Comms on filters (after, Vodafone says, NZ Comms threatened legal action). This side-deal, revealed exclusively by NBR, shows Telecom, at least, is open to an out-of-court settlement.

If no last-minute deal is reached, and Justice Venning rules in favour of Vodafone, my guess would be that he would say Telecom can launch XT in places where filters have already been attached to its cell towers to satisfy NZ Comms – which would be Auckland, Wellington and Christchurch – and injunct it in other areas until filters are attached there, too.

After all, as Justice Venning established yesterday, the filters being installed under the Telecom-NZ Comms agreement will work just as well for solving – or at least dampening – the interference being experienced by Vodafone, too.

Complicating matters, there were contradictory statements about the status of Telecom’s filter roll-out. At one point, Vodafone’s QC told the court that filters were being attached to Telecom towers as he spoke (pushing Vodafone’s line that the Telecom-NZ Comms deal is an admission that Telecom is culpable). At another, he spoke of “supply problems” with the $900 filters.

NZ Comms has told NBR that Telecom’s filter roll-out in Auckland, Wellington and Christchurch will be completed by the end of this month.

Events are finely poised. Answers at noon.