New Zealand: Carriers Forum dismissed as a cartel by new operator

[nbr] Our putative third mobile operator has resigned from a key industry body, the Telecommunications Carriers Forum (TCF), claiming that Telecom, TelstraClear and Vodafone dominate it for anti-competitive ends. But there is a glean of more co-operation ahead.

Last month, a senior Two Degrees (formerly NZ Comms) manager mocked the self-regulatory industry body as the “Telecommunications Cartel Forum” during an interview with NBR.

Today, hostilities were formalised, as Two Degrees resigned from the TCF.

“The stated goal of TCF is to promote competition for the long term benefit of New Zealanders, but its board is dominated by the three biggest incumbent networks whose financial incentives will be to maintain their dominance of the market,” said Two Degrees chief commercial officer Bill McCabe in a statement.

"Any real promotion of competition by these firms would be counter-intuitive. TCF membership is therefore an unnecessary and time consuming distraction for Two Degrees."

Two Degrees is seeking a change in mobile termination rates (MTR), or the amount that telcos pay each other (or, in Two Degrees’ ideal universe, don’t) when calls cross between their networks, among other Commerce Commission-centred crusades.

Two Degrees' boss Mike Reynolds told NBR that he would like it if his company could bust open the mobile market when it launches in August. But if the Commerce Commission doesn't move on termination, its pricing will have to stay close to Telecom and Vodafone's.

The telco has long maintained that Telecom and Vodafone are resisting its version of MTR to protect their own interests. The pair dispute that the commission regulating wholesale prices would deliver a better result than their self-regulation of retail termination charges (which the commission can’t touch), or that there is necessarily any relationship between MTR and the pricing paid by end users.

With its new XT mobile network, Telecom seems to be moving unilaterally to simplify the MTR situation, charging the same “OneRate” for calls made on its own network, or to Vodafone or another rival network.

However, Mike Reynolds told NBR he was wary of the move, suspecting Telecom was trying to make the minimum possible change to get the commission off its back.

The TCF retains a broad membership, numbering cross-over players like Vector, CallPlus and Kordia among its members, along with the traditional telcos.

Ralph Chivers recently resigned as the TCF's chief executive, and today starts his new role as programme manager for the government's $1.5 billion broadband investment initiative.

Mr Chivers' successor has yet to be appointed.

Goodbye TCF, hello TIG?

Two Degrees’ head of corporate communications Bryony Hillness told NBR this morning that her company may still join a second body, the Telecommunications Industry Group (TIG) which set up as a more lobbying-focussed alternative to the more technically-minded TCF.

The TIG got off to a rocky start as TelstraClear - which had earlier boycotted the TCF-led effort to create an ISP Code of Practice under the now “just-resting” S92 - declined to join.

Nevertheless, Telecom chief executive Paul Reynolds said the new body would see rivals “standing should-to-shoulder” as they faced regulatory challenges together.

However, the High Court network interference stoush broke out soon after. In the aftermath of the ruling - described as "a piece of nonsense" by the Telecom boss - the only reason Mr Reynolds would stand next to his opposite number at Vodafone would be if he were attempting to land one on his shoulder.

Two Degrees quits 'Telecommunications Cartel Forum'"