Telecom ringfences surfers and knowledge economy

By Chris Barton

Between the lines

It's unlikely the author of the Kiwi Share was a visionary. But the agreement's restraining powers seem like they were drafted by one who foresaw the potential of the internet.

Written in 1990, its wording - "a local free-calling option will be maintained for all residential customers" - is elegantly succinct.

Local free-calling means "the standard local telephone service provided to residential customers for the Standard Residential Rental in accordance with the Company's [Telecom's] usual terms and conditions."

So simple. That's exactly the same service I and my children use to dialour local internet service provider, when we connect to the web or to e-mail from home.

If we're using that service, the Kiwi Share says it's a free call. Hardly surprising that the Crown Law Office has told Government Telecom's plan to charge 2c per minute for net calls is very likely in breach of the agreement.

So why does the Finance Minister - the Kiwi Shareholder on behalf of the Crown - not use his veto powers?

Perhaps Sir William Birch does not surf the web from his home telephone line. If he did, he would know why we, and some 475,000 other New Zealanders, do.

It's not just that it's such a darned useful communications medium. We want it for our kids - so they grow up in the ways of the net, learn it, contribute to it, and perhaps become a knowledge worker in New Zealand's fledgling knowledge economy. We, the older generation, never dreamed an economy could be built on a telephone line.

Which is why free local calls are so important and why Telecom should never charge for residential local calls just because data, rather than voice, is travelling down the wire. Abundant evidence shows countries with free local calling are winning the knowledge economy race.

Sir William inclines towards Telecom's view that free residential calling applies to only voice and not net calls. But how to skirt the Kiwi Share?

Telecom's subterfuge is to offer free net calls if everyone dials in using phone numbers with an 0867 prefix. Despite the Kiwi Share, Telecom plans to charge 2c a minute if you don't change. It claims the surge in net traffic is choking the phone network - even threatening emergency services.

But evidence to make such a case is scant and prudent provisioning of its exchanges' capacity would also meet demand.

The real danger is that 0867 numbers would ringfence the internet community and, once capture is complete, Telecom may renew its desire to charge for residential net calls.

Thanks to the Kiwi Share, the Government can say no to 0867. That it hasn't moved to stop Telecom's monopolistic behaviour is bad enough. That it doesn't see the damage saying yes will have on the future of our knowledge economy is reprehensible.