Jetstream barely worth it - ISPs

By PETER GRIFFIN

Internet service providers (ISPs) reselling Telecom's high-speed Jetstream internet service have been hit with a $3 a customer a month fee that some believe may be enough to make reselling uneconomical.

The charge, for customers of ISPs who use the Jetstream product and have static ISP addresses, is in a sleeping clause in contracts some ISPs have with Telecom, and is being backdated to September.

An industry source estimated around half of Jetstream customers could be using static IP addresses.

The $3 charge is mainly imposed on ISPs with customers who run web and mail servers. Telecom claims the charge was not introduced earlier "due to shortcomings in the reporting system" which allows Telecom to monitor and bill for static IP (internet protocol) addresses.

Some ISPs estimate they may have to pay hundreds of dollars a month on top of their existing Telecom bills to meet the charges.

Telecom's website says around 30 ISPs resell the telco's DSL (digital subscriber line) services in various combinations. Telecom's ISP Xtra is believed to have the bulk of the DSL subscriber market with about 20,000 Jetstart and Jetstream customers.

Already facing tight margins in the DSL resale market, some ISPs may choose to pass the charge on to customers, bumping up the cost of broadband internet, or stop reselling the products.

Michael Spencer, managing director of eSurf Holdings, said the new charge came as a surprise, but he was always aware it was a component of his contract with Telecom.

DSL customers "barely register on the radar screen" at Mr Spencer's stable of independent ISPs, but the extra fee would not encourage him to push Telecom's products more aggressively, he said.



"The ISPs don't make any megabyte resale charge - Telecom gets all that themselves - so the most an ISP can make out of [Jetstream] is $20 to $30."

Out of that, ISPs had to support their business costs, reducing the margin on each Jetstart or Jetstream connection to as little as $5 a month.

Alan Marston, managing director at PlaNet Internet, said he wasn't approached by Telecom directly about charges for static IP addresses.

Instead, he said, a $5 plus GST "port charge" for Jetstart and Jetstream customers appeared on his bill.

Mr Marston was told by Telecom that the port charges, to which all Jetstart and Jetstream connections are subject, had not been chased earlier because Telecom's billing system could not handle them.

He estimated those charges would cost him around $1000 a month, effectively making DSL products uneconomical to resell.



Telecom spokeswoman Mary Parker said that, as well as a base monthly fee, Telecom charged an extra fee to ISPs based on the maximum number of ports (customer connections) in use in a given month.

That charge varied from ISP to ISP, covered Jetstart and Jetstream customers and was subject to non-disclosure agreements. But the port charges had always been in place.

Some Jetstream customers had static IP addresses attracting the new back-dated charge. Static IP addresses were not allowed on Jetstart accounts, she said.