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Gattung speech raises serious questions - InternetNZ

Media Release - November 1, 2006 - “Yesterday’s address by Theresa Gattung to a TUANZ audience in Wellington raises serious questions, and she should not attack those who ask important questions about how Telecom is behaving,” said InternetNZ President Colin Jackson today.

“It should be a matter of serious public concern when the speech of the
Chief Executive of such an important company as Telecom is at significant
variance from the observed behaviour of her own company,” Colin Jackson said.
“Two examples suffice.
“Ms Gattung said ‘We’ve implemented the Wholesale Charter’,
but this doesn’t seem to be true.
“Principle 2 of the Charter says: ‘The price for such products
will be negotiated on a ‘retail minus’ basis…’, but Telecom did not negotiate on the price
of the services that rolled out on 26 October. It presented the new prices as a
done deal, and wholesale customers had no negotiation over this price at all.
It is not acceptable to expect ISPs to compete at retail – on any UBS plan – at
the current unilateral pricing.
“Ms Gattung said with respect to new unconstrained DSL plans that ‘The
regulated price is set by the Telecommunications Commissioner not by Telecom.’
“The clear implication is that Telecom has no discretion over
pricing. That is simply not true. The Commission’s price applies only to
regulated UBS services, not to Telecom’s commercial offering. It is Telecom’s
choice – and Telecom’s responsibility – that has seen the current price squeeze
come into existence across all the UBS plans, not just entry level.
Mr Jackson was also unhappy with Ms Gattung’s attack on reasonable
critics of Telecom’s behaviour.
“In her speech, Ms Gattung says that ‘We have had to bite our
tongues when some in the industry make claims and allegations that get a run in
the media, even if they are patently untrue.’
“Ms Gattung needs to expand on who she thinks is making untrue
claims, and what claims she considers to be untrue. That is the only way her
claims can be assessed and a proper debate can occur.

“The examples given above seem to show an unfortunate tendency by
Telecom to shoot the messenger and use spin instead of substance when
responding to legitimate criticism.

“Telecom has made improvements, but it should be judged by its
actions, not its fine words.
“Its actions show a price squeeze caused by its own pricing choices.

“Its actions show that it is not following its own Wholesale Charter
despite asserting that it does so.
“Its words suggest the opposite.
“These are serious questions and InternetNZ makes no apology for
raising them.
“Media need to ask the tough questions, and challenge Telecom to do
what it says it will do, and hold the company accountable when it fails to meet
such a modest expectation,” Colin Jackson concluded.

For media comment please contact:
Jordan Carter, Research & Policy Officer, 021 442 649

Colin Jackson, President, 021 393 685

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