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Dateline: 17 May 2000 Early Edition
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Goodbye Free Internet Access
Yes, if Telecom gets its way, there will be no more free lunches on the Internet access bandwagon.

According to Telecom's submission to the Ministerial Inquiry into telecommunications, (as reported by IDG), Telecom wants ISPs to pay the cost of carrying Internet traffic on its network -- and obviously that cost would have to be passed on to the users in some way.

Indeed, if Telecom's submission was accepted by the inquiry as reasonable, it could, depending on the level of the charge and how it was levied, not only spell the end of "free" Internet but also of flat-rate access.

What's worse, the company that just reported a $205 million profit during the last quarter suggests that the government should subsidise the cost of delivering voice and Net access to rural subscribers.

My goodness... I don't see the food industry asking the government to subsidise its loss-leader specials at Foodtown -- why does Telecom feel it's entitled to special privileges?

Now while I'm sure that Telecom can prove that the rental revenue from residential rural connections represents a loss -- I wonder what the situation is once you factor in all those "added value" services such as call-minder, call diversion, city-caller and the like? I suspect this might tell a different story.

If Telecom wants to be able to separate out its loss-making activities and ask for government assistance, then how about it offers to have each of its profit-making activities fall under government scrutiny and subjected to a progressively calculated tax rate also?

But back to residential Net calls -- in effect, Telecom's submission simply transfers the burden of the Internet Tax from the residential user to the ISP -- who will then have to recover it through increased charges. However, if you're Telecom -- your own ISP (XTRA) has an immediate advantage because you can provide service without the interconnect fee for residential users being anything other than a 'book entry."

Perhaps this also explains the sudden cosiness between Clear (a Telco) and Telecom (a Telco) in respect to all things Internet?

Perhaps the most worrying thing about this whole issue is that there's a very real chance that this government will simply accept Telecom's recommendations -- just like the last one accepted Telecom's lawyer's opinions over that of their own Crown Law office. And don't think I'm joking -- after all, they did promise to have the 0867 situation sorted out by February -- remember? And they also (while in opposition) strongly criticised National's lack of action over fostering a knowledge based economy -- but quickly decided that the right thing to do once in power was to play the endless rhetoric game like their predecessors.

Oh yes... I'm still waiting for the Telecom spinmeister to make that call he promised -- but I'm not holding my breath.

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