David Diprose, general manager of regulatory and industry affairs at Ihug and president of ISPANZ, the New Zealand ISP association, is reluctant to talk about the proposal as Telecom insisted on confidentiality. However, Diprose confirms that Ihug and other providers are currently negotiating with Telecom over an improved UBS offer. He adds that it is important that any deal reached is an improvement over the determination left on the table by TelstraClear.

Asked if TelstraClear would get the same deal as the other ISPs, or be stuck with the terms it agreed to in December last year, group manager of communications, Mathew Bolland says Telecom will provide the second-largest telco with the cheaper and faster plans too. He would not be drawn on TelstraClear's feelings over the pricing in the proposal being considerably lower than in the December deal, as well as containing a plan with a faster upstream speed.

The minister of communications, David Cunliffe, was not available for comment. Cunliffe has said he wants to ensure that telcos have quick access to a regulated service when the contracted one isn't as good. This, Cunliffe says, will prevent the "contracting out" below a regulated minimum service standard.