Telecom on Monday announced it had provided a binding offer to Crown Fibre Holdings in respect to the Government's ultra-fast broadband project (UFB).
Also, the company was preparing for structural separation that could end in two listed companies coming from the existing Telecom corporate structure - Chorus and a services company.
Labour Party communications and IT spokeswoman Clare Curran said yesterday Telecom's final offer to claim the bulk of the Government's $1.35 billion to build the UFB network represented an attempt to buy something which should not be for sale.
"Telecom's announcement that it provided the Government with a binding offer on UFB and that it will reorganise its business is its latest move to game-play its way into securing taxpayer money and enormous regulatory concessions," she said.
Telecom was yesterday fined a record $12 million by the High Court in Auckland for anti-competitive practice.
The High Court fined the company for breaching section 36 of the Commerce Act in the so-called "data tails" case, the Commerce Commission said.
The penalty was the highest imposed under the Commerce Act, which was amended in 2001 to increase the fines available for anti-competitive conduct.
Telecom said it was considering the penalty and continued to believe the breach was "technical and unintentional".
It was appealing the High Court's October 2009 decision that it unlawfully used its market power to charge downstream competitors disproportionately high prices for wholesale access to its network from 2001 to 2004.
The move prevented other providers from offering retail end-to-end high-speed data services on a competitive basis.
Justice Rodney Hansen, in the court's penalty judgement issued yesterday, said the effects of Telecom's conduct were injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process.
"The breach was the result of a deliberate strategy, apparently sanctioned at the highest levels of Telecom, to price data tails at a level that would preclude price competition between Telecom and other [telecommunications service providers]."
Justice Hansen said the penalty should reflect the size and financial circumstances of Telecom, and "give full effect to the new penalty regime and the overriding goal of deterrence".
Telecom's appeal before the Court of Appeal was scheduled to start in September.
"Telecom continues to believe that the `two data tails' breach was technical and unintentional, and this is the basis of its appeal," the company said.
The commission's claim related to pricing was suspended in late 2004, and further regulation had meant that market conditions relevant at that time no longer existed, Telecom said.
Ms Curran said the court decision to penalise Telecom for anti-competitive conduct dating back to 2001 triggered warning bells about entrenching monopolistic practice and was further evidence of Telecom's game-playing and using the system to its own advantage.
In the meantime, the winning UFB bidder would enjoy nearly 10 years free from regulation on price and a range of other matters which provided risks to the rest of the telecommunications and emerging fibre industry, she said.
"The Government should be careful that it too is not perceived as game playing with taxpayer money. New Zealand's new fibre network should not and must not be about suiting our incumbent telco and forcing prices to be higher than they otherwise are," Ms Curran said.
