Below is a small selection of typical responses from ISPs (and others) to
the business practice of Telecom's Xtra ISP. There have been countless
press reports, newsgroup messages and articles condemming Telecom.
Path: kcbbs!waikato!quagga.ru.ac.za!howland.erols.net!newsfeed.internetmci. com! news-in2.uu.net!news-m01.ny.us.ibm.net!news-s01.ca.us.ibm.net!usenet From: email@example.com (Steve Withers) Newsgroups: nz.comp Subject: Re: Telecom taking control of NZ Internet Date: 3 Oct 1996 11:20:56 GMT Organization: Completely Organised Lines: 112 Distribution: world Message-ID: <firstname.lastname@example.org> References: <email@example.com> Reply-To: firstname.lastname@example.org NNTP-Posting-Host: 126.96.36.199 X-Newsreader: IBM NewsReader/2 2.0 In <email@example.com>, firstname.lastname@example.org (Manfred Marriott) writes: >Recently, there has been a number of posts here and there about how >Telecom will undercut pricing for other ISP's, then when they have a >large share of the market, and control the 'resources' of the Internet, >raise prices. > >I really find that hard to fathom. Could someone please tell me what >these 'resources' are. How would telecom take charge of them, bearing >in mind IBM and IHUG's experiences. Well......the way this would happen is: XTRA undercuts everyone else on price and puts them all out of business. How could such a thing happen? Well......... XTRA / Telecom try to give the impression they are separate, but they aren't - really. XTRA is marketed via Telecom 123, 126, mail-outs, Netway....and others. XTRA services can piggy back on Netway frame relay links. I have heard of one company who installed frame relay and then had a follow-up offer of Internet access via XTRA through the same link for less than $50/month for additional CIR and less than $1/MB for data. That is a 64K connection. Hard to compete with when your bandwidth supplier is also your biggest competitor.................and the prices aren't transparent. Hard to compete with when they are losing an estimated $800,000 to $1,000,000 a month as an 'investment". XTRA has a huge staff on high wages.........with a huge capital and labour investment for months before they went live, building content and so on. Telecom's pre-tax profit was $1.1 Billion dollars.......22% compared to revenue. This is very high by world standards - particulalry in competitive markets. So losing $12M a year to ensure dominance in Internet market share would be a "so what" proposition. Chicken feed. XTRA also had 'the benefit of the doubt' on 0800 pricing and various contractual matters that would have had to have been signed in blood first, had it been any other company. It's easier when you're part of the Telecom 'family'. Stuff like that. In short - *anyone* who sells Internet access has to buy that Internet access bandwidth from Telecom.......and Telecom pay less for it than anyone else. An example: Telecom is afraid to offer ISPs better dial data prices for regional/national access ("IP-Net") because it might bolster the case against them currently before the Commerce Commission. Wierd argument. You would think that if XTRA really *was* separate, the rest of Telecom would be busting their gonads to make other ISPs competitive - and alive as customers. Instead, they are sitting on their hands. By contrast, when Clear went to $5 on weeknights, Telecom responded in one hour. They had originally intended to go in at $6.50. So they have given residential users better long distnace rates than their business customers (ISPs) who spend millions with them each year - but compete with XTRA. This would be an uncharitable view.........of course, but one can see things this way without too much trouble. This is not a purely local thing. Telcos all over the world are moving to secure ownership of Internet access. The Internet is becoming an alternate phone system and their survival depends on controlling it. The telco in Poland moved to FREE internet acces over 6 months ago. Let's see any ISP compete with that. In the US, AT&T went for US$19.95 flat rate per month - and a year for free for tolls customers. Only the apalling service they delivered at the outset left room for many to breathe - and sell up befire it was too late. As most telcos are semi-monopolies, it is pretty easy for them to wipe out the startups who don't have much capital. That is why, in about 18 months if present trends continue, Internet access in NZ will likely be via Telecom, Clear, Telstra, IBM and one or two other large, global companies. Whether this happens or not, depends largely upon the policies of whatever government eventuates on October 12th. If National wins, backed by ACT, I'd call it a virtual certainty that ISPs as we know them in NZ today will shrivel and die. Living on thin margins, the swipe a a telco price wand could remove their breathing space almost overnight. By contrast, most other parties have made noises about reining Telecom in.....though most have been vague on what that would actually mean. The most commonly talked about proposal is to split off the actual infrastructure and make it a consortium of competitors - or an SOE or some other independent entity. This has just been done in California. The aim is to make all service providers (local calls, Intenret, tolls - whatever) equal competitors on a shared network rather than one of the competitors owning the network and the others trying to compete with it. Politically, poeple need to think about what they want and guide the policy makers. One way or the other. This isn't an anti-Telecom post, BTW.......I am simply trying to highlight the issues that relate to Manfred's question. If I have mis-represented or exaggerated anything, I hope someone will let me know. ************************************************************ Steve Withers - Wellington, New Zealand email@example.com / firstname.lastname@example.org OS/2 V4.0 - It does what you tell it - with VoiceType! ************************************************************
Path: kcbbs!waikato!news.express.co.nz!actrix.gen.nz!john From: email@example.com (John Vorstermans) Newsgroups: nz.comp,nz.general Subject: Xtra's Tony Reeves talks about Privacy and Security. :-) Date: 4 Oct 1996 03:57:47 GMT Organization: Actrix Information Exchange Lines: 90 Message-ID: <firstname.lastname@example.org> NNTP-Posting-Host: atlantis.actrix.gen.nz Xref: kcbbs nz.comp:11122 nz.general:42400 Tony Reeves
wrote: >> Roger Sheppard wrote: >> >> >What is wrong with Actrix..?? >> >> Strange sort of questioning coming from someone who has not had an >> account with us for at least 3 years? >> >Does Actrix regularly publish info on users accounts? You certainly have some odd views on what is reality it would seem. Perhaps you would like to explain what was actually published concerning any users account on Actrix that you imply above? The person I was replying to certainly has no account on Actrix. Of course we take security a bit more serious over on this side of town where at least not everyone in the world can see what users we do have. Mind you I would expect any serious ISP or for that matter, any knowledge network manager who has any remote understanding of security on the Internet to understand why this sort of security is needed. :-) Privacy certainly is an important issue and these days even more so especially when it comes to Internet Users. I can asure you Tony that Actrix takes its users security quite seriously. However puting behind us the disagreements that all the other ISPs have with Telecom and there Xtra Service, perhaps I can express my, and many other ISPs willingness to site down with Xtra and try and work together rather than get into these "there is nothing wrong with our service" or "why is everyone bashing Telecom" battles and try and help resolve some of the problems. The Internet has always had a folklore of co-operation and helpfulness which in NZ seems to be disappearing fast simply because people refuse to talk to each other. Telecom's Xtra has caused some grief by its actons in what was a thriving industry, those industry members all having responded in writing asking to be heard but completely ignored by Telecom. So when these ISPs try and make themselves heard by Telecom via other means are you really surprised? From the ISP perspective Telecom's attitude is quite arrogant leaving little doubt in the minds of the industry exactly what Telecom's intentions are. I must admit I often laugh to myself when I think of Telecom and the Internet as it reminds me of the artical in the Dominion on Monday September 19 1994 by Mr Zwimpfer stating so positively that the Internet was not for Telecom and could never be a success. Now Telecom are scrambeling to take it over as they see it as the biggest threat their is to there dominance in the future communications market. So now we see Telecom rushing to get out there and take over all it can before its competitor Clear can get out there..... yet the plan is falling around Telecom's ears as the service seems to be falling to bits all over the place with security issues, network problems and now we cannot stop hearing about access problems with a network that has only 15,000 users but was designed for 50,000. Of course Telecom's media machine is doing its best to counter the actuality and severity of the problems but few people in the industry are fooled by it. Better to be honest and admit problems when they arise and get them sorted rather than being dishonest with you customer. The internet is a different world to the telecommunications that Telecom is used to.. one cannot continue to fool your customers all the time. I wonder does Telecom have an xtra.general where it's users can publicy discuss these sort of issues.... perhaps we should create one for you. Something like nz.isp.xtra.general where your customers and competators can openly and in public put forward complaints and concerns over what is happening. :-) I wonder how busy the group would be. Okay, business is business and Xtra has as much right to be an ISP as anyone. Not a problem as long as the deal for Xtra is the same as everyone else gets but when a wholesalers goes into the retail market and gets what appears to be plain preferential treatment from the wholesaler what can the rest of us do? Yip, that's right, complain. What happens when you conner any animal with intent to kill.... The advertising and the reality are to different beasts. My personal thoughts of course. Cheers John -- John Vorstermans | Choice, not chance Actrix Networks Ltd. | determines destiny. 282 Wakefield St. Wellington | Phone: +64 4 801-5225 |
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