Telecom in breach

After breaching its separation undertakings, Telecom Wholesale (TW) has had to ditch its broadband and residential PSTN ‘loyalty’ offer.

This means TW will escape any disciplinary action for one of its breaches, but it is still awaiting a verdict on the other breach.

The Independent Oversight Group (IOG) found that TW breached Clause 56 of Telecom’s separation undertakings, which means TW was in fact guilty of discriminating against some customers.

It will become clearer over the coming weeks, what this will mean for Telecom. The IOG has handed its findings onto the Commerce Commission, which will make a decision on how and whether to proceed with the matter. As stated in the undertakings, the Commission is able to take enforcement action in the High Court for each breach of the undertakings, which could result in a pecuniary penalty of up to $10 million for each breach, plus $500,000 per day for continuing breaches.

As is the case when the law, or lawyers are involved, everyone seems to play by the rules.

Orcon and Vodafone, which were the complainants in this case, reacted in a very restrained manner.

Orcon CEO Scott Bartlett’s comment, which can always be relied upon as ‘colourful’, was bordering on dull. He simply stated that the loyalty offers were structured in a way to disadvantage Orcon and its customers. “We eagerly await the outcome of the Commerce Commission’s process.”

Vodafone’s spokesperson Paul Brislen, who has never been shy of flying Vodafone’s flag, also dressed his words in formal attire. He says that the company is very happy with the announcement, “but we would like to see more details and what will come next.”

Meanwhile, Telecom Wholesale CEO Matt Crockett is disappointed by the IOG’s finding.

“We launched the broadband and residential PSTN offers to compete for ourcustomers’ business. We felt the offers were consistent with, and in the spirit of, theundertakings and competition,” he says. “While we are disappointed, now that the IOG has confirmed its interpretation of the undertakings we will abide by the decision and act accordingly.”