On 2012-09-23, at 18:40, Matthew Poole
I'm sure others who were around at the time will correct any mistakes, but the way that the likes of i4free and zfree came about was that Telecom charged Clear a lot more for interconnect termination than they were prepared to pay for the reverse.
Telephony providers' long-held settlement agreements for voice interconnect were based around the payment of termination revenues to the telco who terminated the call. Such settlement regimes were/are negotiated based on expected settlement amounts, were modulated by hand-waving about sunk investment in infrastructure, and were agreed like any commercial negotiation based on who had the most to lose by not giving in. See /business/ (n). I was at CLEAR (as comms insisted we capitalise it at the time) around the time of the great free ISP bubble, but I was certainly far too minor a peon to be involved in interconnect agreement negotiations. Hence even if I wanted to run the gauntlet of public disclosure of private details, I couldn't. Not that I would, of course.
From a (relatively) outside perspective then, we could imagine that the interconnect agreement in play at the time of the bubble did not anticipate the rise of dial-up Internet access and its potential effects on termination revenue. With CLEAR able to bill Telecom $0.0XX per minute to terminate a call on a CLEAR PRI and Telecom effectively recovering zero revenue on residential dial-up users (since local calls were free) it ought to be fairly obvious how the commercial pressures at play encouraged dial-up access speculators to get very competitive pricing on ISDN and other infrastructure so long as they could keep the PRIs running hot 24x7.
I seem to recall that the interconnect agreement between CLEAR and Telecom was renegotiated soon afterwards, following which (a) the 0867 thing survived with minimal shouting from CLEAR, and (b) the free dial-up bubble burst. Draw your own conclusions about how fun that negotiation was for each respective side. I know which side of the table I would have enjoyed sitting on. The whole episode has its origins in the unexpected pressure that dial-up Internet users put on a long-established tariff for call termination. I don't see it as the result of any predatory or monopolistic behaviour by anybody. The use of interconnect agreements to generate positive revenue from call termination is far older than CLEAR, and the use of that billing model is far more widespread than New Zealand. Joe