The Commerce Commission this week withdrew its long running action against Telecom relating to Megaplan pricing.

The Commission believes that Telecom's changes to the pricing of Megaplan services in 1988 and 1989 may have been at risk under the Commerce Act, however the Commission has concluded that the time and costs involved in pursuing this matter to finality would be greater than any benefits which might result.

"The particular conduct the Commission was concerned about has long since ended," said Commission Chairman, Dr Alan Bollard. "Furthermore the legal and factual issues raised by the case are complex and would have led to a lengthy and expensive hearing, the benefits of which would be uncertain."

"The case has little relevance in the current telecommunications industry environment and a decision in this matter would not set any important precedents for the future," Dr Bollard said.

The Commission and Telecom agreed that proceedings related to the Megaplan action would be withdrawn with each party to bear its own costs.

Media contact:Communications Officer, Vince Cholewa

phone work (04) 471 0180, home (04) 479 1432

Background note

In October 1991 the Commission commenced proceedings against Telecom alleging that in raising prices related to its Megaplan services during 1988 and 1989, Telecom had contravened section 36 of the Commerce Act. Section 36 prohibits the use of a dominant position in a market for anti-competitive purposes.