Rigid rules in the only game

By PETER GRIFFIN

A trip across the Tasman re-introduced me to a stranger - healthy competition for telecoms and internet services.

Newspaper ads offered high-speed, cut-price internet access with waived joining fees, generous free-minute mobile packages where you could keep the same phone number for life - no matter who you signed up with.

I got that feeling you get driving along a freeway in the United States with the billboards flashing their seductive deals at you - everything from cheap gasoline to garden furniture.

You feel you're being ripped off back home.

Competition isn't exactly rife in Australian telecoms, but they're further on than New Zealand.

What have we had from Telecom in the past few months, apart from miserable new rules and price hikes?

Most recently, of course, is the $6 fee for customers who are late in paying their bills.

If you don't pay your bill on time you should expect to be harassed by recorded messages, bombarded with letters and even cut off at some stage.

But charged an extra six bucks? That's outrageous.

Telecom dragged up some story about late payments costing it $17 million a year.

So what? Keeping customers happy comes at a cost.

Last month, Telecom again bumped up residential line rental charges in line with the consumers price index increases within which it is required to stay.

Subscribers now pay between $1.05 and $1.25 extra a month, bringing the monthly bill to $39.30 for most.

Surely Telecom should be giving us fewer reasons - not more - to seek out an alternative provider as it struggles to maintain growth.

After all, Telecom's investment in its fixed-line network has long been recouped.

The move to the next-generation network the company is building will slash the cost of delivering calls.

Financial analysts love Telecom's ability to squeeze more money out of its fixed-line monopoly.

It means the New Zealand operation is better able to subsidise the flaky Australian business, which is tipped to face tough price competition this year after the launch of Hutchison's 3G network.

The New Zealand market does not have such downward pressures, which explains Telecom's subtle tightening of the screws.

But not all the changes have been accompanied by fee increases.

Just before Christmas, Telecom's internet provider business, Xtra, decided to block pop3 mail access for its customers trying to access their email accounts over the networks of rival internet providers and telecoms operators.

This means Xtra account holders who subscribe to the likes of Vodafone or Paradise can't download their e-mail straight into Outlook Express.

They are now subjected to wretched webmail interfaces.

Last year's rural lines issue sparked a more vocal outcry, although it was a bit of a side issue.

It blew up in Telecom's face as politicians weighed in on the side of rural dwellers who railed against a new policy that would make some pay thousands of dollars to have a new phone line installed.

To be fair, why should second-home owners expect Telecom to pay huge sums for new cables to be laid to their freshly concreted doorsteps?

But it was yet another sign of Telecom's hardening attitude.

Businesses, too, were hit.

Last year Telecom thumbed its nose at one of its larger customers, second-tier telco CallPlus, by bumping up the prices it charges CallPlus for connecting to the Telecom network.

Telecom bluntly told CallPlus the price hike was to cover concessions worth millions of dollars that TelstraClear won from Telecom.

The result of all this posturing: less flexibility for paying customers who haven't anywhere else to turn.

But all Telecom is doing is alienating its huge customer base at a time when it desperately needs people to spend more on a wider range of products.

For the time being, we put up with it until the paperwork being worked through at the Commerce Commission is cleared and new determinations give the TelstraClears and Worldxchanges a cost-base to compete.

If only our competition watchdog even appeared to be passionate about promoting competition.

Last week, Australian Competition and Consumer Commission boss Allan Fels was again shaking the tree, lambasting the poor state of competition in the telecoms market.

"In the local call services market competition has had very little impact," he told Australian press, before going on to have his most public slanging match with Telstra chief executive Ziggy Switkowski.

Switkowski said Fels "was out of touch", Fels said Telstra was "avoiding the issue and playing the man".

Can you imagine such an exchange between our own telco commissioner, Douglas Webb, and Telecom boss Theresa Gattung? Never in a million years.

Is the state of play here much different to that in Australia? Not really. Both have big, cash-generating telcos with healthy monopolies.

Is Telecom pulling up the drawbridge and boiling the pots of oil ready for competition? Most certainly.

But its customers will remember the niggling fee increases and anti-competitive plays when, finally, another phone company comes to town offering to keep us in touch.

* Email Peter Griffin