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Commentary for: 16 February 1997
Last Week's edition

It's pay-back time!
award logo As the eagle-eyed amongst you will have noticed, I've pulled all the email addresses that used to reside on this site and replaced them with links to a contact form.

I've had only a couple of complaints about this from people who don't like filling out forms and would rather click on a mailto link (which pops up an email form from your browser anyway).

The addresses were removed in an attempt to reduce the amount of unsolicited junk email I've been receiving (as we all do). Well I'm pleased to say that I've already noticed a significant tailing off of and now I'm down from a peak of 20-30 (sometimes more) per day to around 2 per day. This measure, combined with the use of a completely different address for my usenet posting seems to have been very effective and certainly worth the minor inconvenience it may cause some users.

It's worth noting that the old email addresses will still work so you don't have to use the form.

The even more eagle-eyed amongst you may have noticed a link to this page which appears on both the Aardvark and 7am.com front pages.

It's a little bit of pay-back for those who waste my time with junk email and although it might not have any real effect - it sure makes me feel good ;-)

My server logs indicate that the 7am and Aardvark sites are regularly (sometimes up to 5 times per day or more) being scanned by junk-mail list creation programs. Here's hoping those listed on my payback page get their just deserts. If you've got a Web page, why not create your own pay-back page or at least link to mine?

Xtra's new pricing
Within hours of Xtra's announcement that they'd be offering a "one-number, one-price" service, complaints were being hurled around that this was a further abuse of their monopoly position.

Most readers will remember the huge fight that occurred between Xtra and Voyager over the issue of toll-free pricing through the 0800 telephone service, a fight that didn't die until John O'Hara and Chris Tyler both moved on to pastures new.

So are Telecom giving Xtra some kind of preferential treatment? Do they get an unfair advantage because of their position within the Telecom structure?

To be honest - I don't know and I suspect that there are very few who do, although many will be more than happy to speculate.

It's pretty easy to slap an "evil empire" sticker on Telecom's back over this move but is that fair?

Let's look at what's happened since Xtra first came into the market.

First up virtually every other ISP claimed "foul" and many people voiced the opinion that Xtra's aggressive pricing would force many of the smaller ISPs out of business. Has that happened? No - there are more ISPs today than there were when Xtra first started and a lot of them are still charging more than Xtra.

Others claimed that Telecom's ownership of the PSTN and ability to promote and bill for service through their existing phone-accounts was unfair. Is it? Probably - but it's hardly done them much good until recently. Xtra had huge problems with their billing system that must have cost them dearly during those early days and besides which - ClearNet and IHUG both seem to have grown significantly even in the face of such "advantages".

Some claimed that Telecom's huge capital base would allow them to use the latest technologies first and effectively lock out other parts of the market. Nothing could be further from the truth! While most other ISPs have been providing 56Kbps support for several months - Xtra is still stuck at 33Kbps. Innovators such as IHUG have even jumped eons ahead of Xtra by offering wireless Net-access through their Star Net service. Others such as IProlink continue to do very well by providing an extremely high level of performance and service to those seeking a "premium" ISP service and in short, there's still plenty of room for everybody.

Now as most will realise, I'm no Telecom toady - I've been poking the borax at them ever since they launched that original god-awful Xtra web site, but I think it's time to look objectively at what their presence in the market has done.

Read the fine-print first!

Much as I might hate to say it...
Xtra is good for the Net?
First up let's look at how the NZ Net has been affected by Telecom's entry into the marketplace:
  • Surfing the Net is much cheaper! At the time the Xtra service was launched, there were ISPs that were still charging up to $20 per month plus $10 per megabyte for Internet access. In fact volume-based charging was the norm and most of us were very careful to surf "economically", loading graphics only when necessary and avoiding bandwidth-intensive sites. Look at what we're paying for Net access today and how the move to time-based charging has produced the freedom to do whatever you want without weighing up the costs associated with downloading large files or glitzy graphics.

  • The Net now has business credibility. Xtra's movement into the Internet market here in NZ can be likened somewhat to IBM's decision to make personal computers at a time when the market was flooded with many small players. It provided the level of credibility necessary for business to take this whole thing seriously. Back in the late '70s, those of us in the computer business knew the benefits that even an old Z80 machine running CP/M could offer - but many businesses weren't interested because of the perception that without the "IBM" sticker, it wasn't a real computer. Just look at how much larger the NZ Internet population is now.

  • We have more local content. As I've said on numerous occasions, the Xtra Web site is now a mine of really interesting stuff if people would only take the time to look around. They appear to have spent a huge amount of money fostering local content - something that can't be said of many other ISPs. They've also apparently proven the viability of Web-based advertising, something which may not excite the average Net user but it's sure good news for other site operators and content creators such as yours truly.

  • Other ISPs have flourished. It's well known that a significant number of Net users start their online activities with Xtra. Xtra's help desk ends up performing the onerous task of educating these people and sorting out their problems during those early weeks. Reports from other ISPs indicate that a good number of these people then go out and get another account with an alternative ISP that offers a lower price or even a flat-rate. It would appear that Xtra has become the "training wheels" of the local Net and I'm sure it's made life a little easier for other ISPs.
Now I see (in this article) that some of the regional ISPs are complaining that Xtra's new pricing will put a lot of pressure on them. Unfortunately I don't have a lot of sympathy - they're in the same boat as ClearNet who have said they won't match Xtra's prices. They're going to be forced to compete on the basis of quality of service and performance rather than price. Just as other ISPs have flourished since Telecom brought the metro prices down to $2.50/hr, I'm sure that many rural ISPs will also continue to thrive providing they maintain their standards.

Should my sympathies be with the ISP or the Net user? Well there are a whole lot more Net users than there are ISPs and history has proven that price is not the deciding factor in many cases. Rural ISPs may need to reduce their profit margins on the access component of their operation somewhat - but then again, access isn't the only way to earn a dollar from your customer base - there are a lot of "value-ad" services you can offer that the Telcos can't so put your thinking caps on and take advantage of your strengths.

Now I don't know about you but I'm damned sure that I would not want to go back to paying $10/MB for Internet access and I'm glad that competition has hastened the arrival of things such as wireless Internet. I'm also very happy that advertisers are now prepared to pay enough to support online publications such as the one you're reading now so maybe, amidst all the Telecom bashing that has resurfaced in the past week, we should be honest enough to realise that every cloud has a silver lining.

So, have I sold out to Telecom? Not bloody likely! Even though they flew me and a handful of other "media people" around over Auckland last week in a DC3 as part of their "NZ Plan" announcement, I still call it as I see it.

I won't be convinced that the chinese wall between Telecom and Xtra is as strong as claimed until I see what the base-pricing for the Telecom IPNet service is (they would not disclose this information to me last week). Several other ISPs have also complained that Telecom won't disclose pricing information - this is something I consider to be a major concern. Also, Telecom are claiming that the IPNet service is not yet a "released product" and that Xtra are sharing the risk while the final stages of testing are completed. Well guess what guys... it's not just Xtra who are sharing the risks - it's also their customers. They'd better not turn off the existing 0800 and local-number access before they're 100% happy that things are sorted and the product has "general availability" or they're asking for trouble.

Of course Telecom would love to dominate and control the Internet market, if they deny this then they're not being fair or honest to their shareholders - but we should not be so quick to dismiss the facts that so far, their presence in the market has not been all negative.

I will now unplug the phone and brace myself for the deluge of email that will flow from all those who think I'm crazy. Better still, why not shoot me down in flames by using the Aardvark Forums.

Ya should have been there!
As I mentioned above, Xtra treated a number of the Internet and computer press to free flight over Auckland last week in an aging but still comfortable DC3 from the Ardmore War Birds.

I've got to say that this was a very "interesting" experience.

Obviously Xtra were looking for a "captive audience" for their announcement - I could tell that because there were no parachutes provided.

All the important scribes were there including the lovely and talented Louise from Netguide, Chris Barton from The Herald, Stephen Balantyne from NBR, and the IDG boys - Russell Brown and Anthony Doesburg.

It was interesting to note that while everyone else arrived in their own cars, the "perk-boys" from IDG rolled up in a Corporate Cab - just one step away from a chauffeur driven limo.

As 20 people fought for possession of the few seats immediately beside the "exit" signs, it became apparent that not everyone was entirely comfortable with the prospect of hurtling around over Auckland in an aircraft that was built back in the 1940s. Eventually the strongest and fittest prevailed so Stephen Balantyne and myself scored the exit seats with Anthony Doesburg having to be content with a seat that saw his ear stuck hard against the PA speaker - something he later regretted as small pieces of his brain ricocheted around the cabin when the captain announced that we were about to take off.

I really wish I was a Web Cowboy on that flight - I could have pulled out my little Fuji and captured the expression on Ian Scherger's face as we dropped about 100 feet through an air pocket while he was explaining the benefits of Xtra's new plan. And I thought the aeroplane itself was painted a lovely shade of green - that was nothing compared to the earthy tones of Ian's face as his white knuckles clenched the microphone in fear.

Unfortunately the cloud-base was too low to buzz Auckland city so we had to make do with some low-level passes over Rangitoto island and the Whangaporoa peninsula. I joked about how they'd need a pretty narrow drinks trolley to fit up the isle - but then realised that I obviously didn't attend enough of these junkets - because they really did serve drinks from a trolley!

While some of us cheered and enjoyed the turbulent conditions, I've got to say that there were an awful lot of very quiet people on that flight - maybe it was just Bob Smith's (Xtra's General Manager) enthralling presentation - I don't know.

Don't worry readers, despite what you might think after reading my comments about Xtra this week - I'm not about to be swayed by a free aeroplane ride. I'm still going to call a spade a spade!

Still, this is the first junket I've attended for quite a long time and it was fun. I did stop off at the supermarket on the way home go grab an extra packet of borax though ;-)

Perks over Auckland

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