Global Mode company says it will complain to ComCom; releases letter from Sky TV, Spark, TVNZ & MediaWorks

Bypass Network Services Ltd (BNSL), the company that created the global mode technology used by CallPlus, says it does not have the resources to fight a cease-and-desist action brought by Sky TV, Spark (owner of Lightbox), TVNZ and MediaWorks.

However, the three-man, Auckland-based company says it will make a complaint to the Commerce Commission about what it calls the "chilling effect" of the legal action on the media market.

The company has also released the cease-and-desist letter sent to it by Buddle Findlay on behalf of Sky et al last Thursday.

Read it here.

The letter also names the other ISPs being targetted. As previously flagged, it includes ISPs in the CallPlus stable (Orcon, Slingshot and Flip), who collectively hold around 13% of the ISP market.

It also names several smaller ISPs using the global mode service: Singapore-owned UFB-specialist MyRepublic, Evolution Wireless, Gisborne Net, Netspeed, Unlimited Internet, Mynx Net, Primo Wireless, EOL and Lightwire.

The letter says global mode exploits New Zealand rights to copyright works exclusively held by Sky TV et al. It says BNSL conduct in relation to global mode amounts to an infringement of the Copyright Act (1994).

It gives BNSL until 5pm, Wednesday April 15 to cease supplying its global mode service, and publicly acknowledge it is unlawful, or face legal action.

CallPlus CEO Mark Callander refused to supply NBR with a copy of the letter sent to his company. His company's lawyer, Lowndes Jordan partner Rick Shera, told NBR he had no instruction to comment. Mr Shera's earlier arguments in support of global mode are in NBR's earlier story here.

"How is NZ supposed to progress if small innovators are always at risk of being stamped on by the big boys," says BNSL CEO and shareholder Patrick Jordan Smith.

Will BNSL consider joining a joint defence mounted by CallPlus and other ISPs in the gun? Commercial director Matthew Jackson tells NBR he will discuss that possibility with CallPlus' boss Mr Callander. 

The Commerce Commission has previously been open to investigate Sky TV over content contracts and allegedly anti-competitive behaviour.

A 2013 letter from the regulator to Sky TV warned that "'Key commitment provisions of Sky's contracts with RSPs [retail service providers] are likely to have previously breached section 27 and were at risk of breaching section 36 of the Commerce Act by hindering competition in the market for pay TV in New Zealand". However, the ComCom did not take any action.

ckeall@nbr.co.nz

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