Telecom survives appeal of antitrust case over Internet access

Tuesday 4th August 2009

Telecom Corp., the biggest company on the NZX, has survived an appeal of a court ruling clearing it of anti-competitive behavior in the way it charged residential customers for internet access in the late 1990s.

The High Court last year rejected a Commerce Commission case that Telecom used its dominant position in the market for fixed line residential phone services when it introduced its 0867 internet access package in 1999. The regulator appealed the ruling, but the Court of Appeal has now turned down the appeal.

The case stems back to Telecom’s 1999 announcement that residential customers would be charged for calls to internet service providers unless they used an 0867 dial-code. The phone company only made the 0867 number to other carriers if they agreed that the access wasn’t covered by existing interconnection agreements, so Telecom wouldn’t have to pay charges related to those calls.

“The commission is disappointed but will study this ruling, and consider next steps,” said general counsel Peter Taylor, in a statement.

Shares of Telecom climbed 1.1% to $2.86 today and have gained 21% this year. Today’s gain lagged behind a 1.9% advance for the NZX 50 today.

“We were always confident in our argument,” Telecom spokesman Mark Watts said. “The case and circumstances relate to another time and place and how exponential growth in the internet was managed. These things take a long time to work through the system.”

Businesswire.co.nz

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