26 May 2011

Telecom to face legal action

2:45 pm on 26 May 2011

The Commerce Commission has accused Telecom of discriminating against its rivals and says it will take legal action.

The regulator says the telecommunications firm failed to provide rivals with equal access to its network.

The commission argues that Telecom should have allowed its competitors to provide their own voice services from unbundled exchanges in addition to a higher speed Telecom broadband service from a roadside service.

It argues Telecom's actions harmed competition, deterred investment and resulted in a significant commercial gain to the incumbent.

If proven, the breach could cost Telecom up to $10 million and $500,000 a day for ongoing breaches.

On Tuesday, it was announced that Telecom secured the contract to build most of the country's ultra-fast broadband network.

Having surged following news of the broadband contract, Telecom's shares fell back 2% on Thursday morning.