On 24 September 2012 10:40, Matthew Poole
The version I heard was that Clear had to pay lots to Telecom because more calls went from Clear to Telecom than the other way, so getting Telecom customers to dial into Clear (and it was dodgy so you'd have to dial up when it dropped out every half hour or do) meant Clear could get money back from Telecom.
My understanding is that Telecom would pay on calls into Clear (expected to be toll calls) and Clear would pay Telecom on calls that came back out at the far end into Telecom's network and terminate. What ISPs, and call centres, provided for Clear was a call sink where the call stayed in Clear's network and Clear kept the money. The small toll-bypass fee for long-distance carriage that Telecom expected to pay most of the time suddenly turned into long-hold local calls terminating in Clear. Quel horreur. Hoist on their own petard Telecom did what any counterfactual argument would predict, changed the rules. That only a market dominant incumbent would have the coercive power to demand this didn't seem to penetrate the judicial assessment of the case. The interconnect hand-waving is a complete farrago. We pay to receive as well as call, in the PSTN and elsewhere (except postal, where this all began), and so the delivering network has no justification for additional fees. The payment is even more explicit wrt to the Internet, ISPs meter up and down and are paid, well. Interconnect fees (for termination, not the toll-bypass (transit?) example) are simply well-argued, by market dominant incumbents, anti-competitive barriers to entry. It will be interesting to see how our new Telecommunications Commissioner with a background including credit card interconnect will regard these tantrums: "Visa and Mastercard Case – Progress so Far In 2006, the Commerce Commission and a group of major retailers issued civil proceedings against Visa and MasterCard and against participating banks. The allegation is that the schemes’ interchange fees and rules breach the restrictive trade practices provisions of the Commerce Act 1986. In August this year, the Commission settled with Visa and MasterCard, agreeing on some changes to fee setting procedures and to the rules. At the time of writing this outline, the Commission has not settled with the banks, nor have the retailers settled with either of the card schemes or with the banks. Any remaining claims will be heard at the High Court in Auckland, starting in October this year. This conference session will update the progress with the case and summarise the economics of payments schemes. Stephen Gale, Director & Ben Gerritsen CASTALIA ADVISORS" http://www.brightstar.co.nz/content/brochures/2009/BC032.pdf Hamish. -- http://hamish.kiwi.me