1 Sep 2010

Telecom did not abuse power, court rules

6:43 pm on 1 September 2010

The Supreme Court has confirmed that Telecom did not abuse its market power at the beginning of the dial-up internet age.

New Zealand's highest court has rejected an appeal by the Commerce Commission, which had already lost cases in the decade-long dispute in the High Court and Court of Appeal.

In 1999, Telecom unilaterally imposed a new phone number prefix (0867) on Clear Communications and other competitors in order to stem its losses under existing contracts on dial-up internet calls.

The Supreme Court says Telecom was the dominant player in the retail and wholesale markets in the late 1990s, but would have acted the same way even if it had not been.

The court ordered the Commerce Commission to pay Telecom $50,000 in costs.

Telecom says it is pleased that its actions have been vindicated, but just wants to move on now.

The Commerce Commission has not commented yet, saying it is studying the decision.

A telecommunications users' group is confident that such a long court battle could not happen again.

Telecommunications Users Association chief executive Ernie Newman says the commission is much more pro-active in policing the industry than it used to be.

Mr Newman says Telecom's behaviour undercut the business model of its competitors, but the matter is now only of historical interest.