Telecom's Xtra ISP

From: alank@voyager.co.nz (Alan Keatinge)
Subject: Telecom Xtra
Date: Thu, 21 Aug 1997 02:51:26 GMT
Organization: OzEmail Ltd - Australia

My experience with Xtra may serve as a warning to others on their
network. After being on Xtra since it began, my account was
terminated, for no other reason than I repeatly argued about an
incorrect account of $15.62 for extra services on Xtra. My account
with Telecom is currently in credit. So beware of disputing any
account from Xtra. If you want to stay with them, then shut up and say
nothing. The big switch is always handy.

Alan Keatinge

I have always maintained that KCCS is nothing more than a glorified collecting service for Telecom. Over the years KCCS has become almost totally dependant on services from Telecom as they, for all practical purposes, had the total monopoly on telephone and data services.
This has become more so as KC, from March 1996, moved away from dealing with Waikato University for International data services to directly dealing with Netway, a wholly owned Telecom subsidiary.

I used to smile at the flying-off-the-handle articles damming Telecom that would appear from time to time in nz newsgroups. The service they provided me was reasonable (11 phone lines and a 48Kbit MDDS data link in 1992/3). Even the Telecom staff I had to deal with were friendly and helpful, though it could be somewhat frustrating actually finding the person you needed to help with technical issues.

Now my attitude has totally changed. (that was in 1997)
To say that I get angry every time Telecom is mentioned is an understatement.
The messing around I have had to put up with from them, broken promises on Stacked Wideband Digital Data services, the announcements that Telecom recognised ISPs as an important business area and have appointed yet another ISP support team/senior manager to take care of our interests, etc., etc., are now all (with 20/20 hindsight) nothing more than an absolute load of bullshit. I have definitely learned that Telecom are masters of telling customers what they want to hear while having no intention or else being totally incapable of delivering promised solutions.

The reason I say this is because over the last year (since August 1995) KCCS has been treated with (IMHO) what borders on total contempt by Telecom. The Telecom staff I have had to deal with have made promises and statements that Telecom were subsequently not prepared to honour.
This has cost KC many lost hours in wasted meetings and phone calls and led to investment in some very costly routing equipment to manage the promised services (the Telecom employee concerned pushed us to get the equipment asap so that the service could be installed).
The situation moved into total stupidity when half of the promised service was installed (at one of three sites in NZ) and Telecom proved that the service was technically viable.

Despite months of excuses and more promise dates when everything would be installed the final end story happened in June 1996 when Telecom totally reneged and announced they were not prepared to provide the digital data services as promised on many previous occasions.
They even went into denial mode trying to say that no promises were made and that the stacked wideband service I did have was only installed on the understanding it was experimental. Funny nobody at Telecom ever bothered to tell me or their staff I had to deal with, before I was encouraged to spend big on the required equipment.

And the latest bullshit? After announcing that Telecom were to become an ISP we had reports in the local press assuring everyone that Xtra would not get an special treatment from Telecom - something about an Independant Business Unit springs to mind.

Now just a couple of months down the track we have seen Xtra slashing their end user rates. $2.50 per hour connect time to Xtra in the major centres.
Wow!, immediate panic from many existing ISPs. How can Xtra offer such a low rate?
A slightly more cursory look at Xtra pricing shows that $2.50 rate is using local dial in numbers in a free dail zone. Outside the major centres there is a $4.95 (or whatever) per hour charge BUT that is using an 0800 dial up number.
Some simple arithmetic. Telcom are selling Xtra 0800 number services for $2.35 per hour!!! How can this be? Call any Telecom sales office and the per minute charges for an 0800 number service is certainly much much higher that $2.45 divided by 60 (about 4c per minute).
And how do Telecom and Xtra justify this?

Now enter the local computer press. Not just one, but just about ALL of these have supported Telecom claims to be the 'largest' ISP in New Zealand. 10,000 users is an oft bandied about figure for the number of Xtra users. No proof, no research, it seems to be one of those figures that appeared in a bubble over some press reporters head after a liquid lunch. Or could it be a figure that Xtra placed in that bubble?

We shall never know. Some brave souls in nz.general actually challenged the authenticity of this 10,000. The most likely explanation offered was that it was the number of printed Introductory packs printed and issued by Xtra. Anyway, IMHO a bloody scam.

So now Telecom have used this 'largest ISP in NZ' to justify the price of 0800 number services they provide to Xtra. Apparently anyone with comparable size to Xtra can easily negociate similar 0800 number pricing from Telecom (so they say).

Just who the hell is trying to fool who?
Telecom and Xtra ARE THE SAME COMPANY. It does not matter one iota how many customers Xtra have or how many 0800 numbers they are going to use, the fact they are part of Telecom should be bloody obvious to anyone that they will be using Telecom services either free or for some token amount to satisfy some unknown Telecom accountant's for things to 'look right' on some accounting report.

Will we ever actually see any of this? Will Telecom disclose the Xtra user numbers (that can be verified) or truthfully disclose the costs of running the Xtra ISP or what value of existing Telecom resources are used by Xtra?
Certainly not. And why should they?

So for this independant business entity rubbish.
What does it mean?
As far as this somewhat myopic ISP can see Xtra are getting some very favourable deals from their parent company. The list is:

  • The lowest pricing (if they really pay anything) for 0800 number services way below anything that any other ISP would have to pay.
  • Full use of the extant Telecom accounting and billing services - you get your Xtra bill as part of your ordinary Telecom bill.
    And it appears very likely that if you dispute your Xtra bill and refuse to pay it then there is a fair chance that Telecom will treat it as an ordinary unpaid telephone account and disconnect your phone.
  • Use of Digital Data Services to move Xtra stuff around NZ, services that other ISPs find is one of the most expensive cost centres of their operation.
  • Use of International Internet connections, no doubt via another Telecom 'independant' company, Netway.
  • A massive and expensive advertising campaign paid for by Telecom, pretty clear to just about everyone a case of cross-subsidy.

    Anyway my real heartfelt feeling about Telecom and Xtra could be summed up by the statement:
    Bastards. I hope they go out of business asap.

    Xtra update - 29 Aug 96

    So now I see that Chris Tyler the bossman of Telecom's Xtra ISP service is trying to cover his ass as much as possible. He obviously knows about the complaints either at or on their way to the commerce commission and new threats of legal action against Telecom seem to be coming from more directions practically every day.
    So his latest ploy is to make it public knowledge that any ISP in New Zealand can get the same priced 0800 number services from Telecom as Xtra obtain. The cop out for Telecom is that Xtra gets bulk prices because of the volume of 0800 number business they do.
    Nobody at Xtra or Telecom seems to have any idea what this level of business is or if there is some scale of service or other published scheme with business levels vs prices paid.
    One ISP in Hamilton, The Net, has already seen some business moving from them to Xtra. Mike Sanderson cannot get 0800 number service from Telecom for anything near the rate Xtra is advertising.
    When he contacted his account manager after seeing an article in the Waikato Times where Xtra boss Chris Tyler had stated that ISPs can get the same 0800 number deals, Mike called his Telecom account manager Peter Vincent to ask for the same deal. Of course Vincent was lost and referred Mike to Clive Litt, Telecom's Media Relations Manager who came out with that well rehearsed story about same prices if you are doing the volumes Xtra are. When Mike pointed out the simple truth that Xtra had these prices from day one and that they had zero customers before that day then how could they be a volume user of Telecom 0800 number services. Too much for Clive Litt so up the Telecom ladder again to a Barry Davis, Market Opportunities, a person who again had the same cost/volume story but promised he would find out more. Problem with this person was that he refused to give Mike his contact number and said that further enquiries had to go his account manager Peter Vincent.
    Mike intends to pursue this further next week as he can see Xtra daily taking his customers, the only reason being cost and the very favourably priced 0800 number service that Xtra have. I will be following this one with some interest and I will be calling KC's account manager next week to demand the same 0800 services.
    Anyway Clive Litt's number is Wellington (04) 498 9361. Please call him and ask for an explanation.

    Telecom renege on Centrex ISDN scheme - December 1996

    Telecom have now changed the business conditions of how Centrex ISDN is billed in an effort to curb the move from DDS to ISDN for Central Business District (in the main NZ cities) internet customers.
    For some time Telecom NZ have been making noises that they are unhappy with ISDN being used for Internet connections. Press reports quote Telecom as stating that Centrex ISDN was not designed for data applications but intended for voice applications and that its current use for high bandwidth data connections to the internet is to be discouraged.
    From November 1996 it will no longer be acceptable to have Centrex ISDN connections to an ISP where the ciustomer pays for their ISDN BRI. Instead Telecom now insist that all ISDN services included in one Basic Business Group must have one point of billing before Centrex can be implemented between and ISDN connections.
    This is seen by many ISPs as a pretty poor attempt to cut back on the low price ISDN data connections that many users in the CBD (of Aukland) have taken advantage of since early 1996. The rental for a BRI in the CBD is NZ$120 per month so most ISPs see no problem in actually taking over the BRI currently at customer sites.
    Centrex has the major cost saving over non-Centrex ISDN calls in that within the CBD there is no per minute charge for calls. This means that almost permanent ISDN connections are being used for internet connectivity and the cost to an end user (company etc) is about 15% of the cost of having a 64Kbit Metropolitan Digital Data Service installed. When compared to the cost of a 128K MDDS the cost savings are substantially more (a BRI ISDN has two 64Kbit channels available which can be multiplexed to provide a single 128Kbit channel)

    ..and now a warning about Xtra's latest marketing techniques...

    From: radiodoc@ihug.co.nz (BR)
    Newsgroups: soc.culture.new-zealand,nz.general,ihug.people,ihug.general
    Date: Fri, 04 Apr 1997 06:26:55 GMT
    Organization: The Internet Group Ltd
    Lines: 26
    Message-ID: <33449b1d.4070960@newsource.ihug.co.nz>
    X-Newsreader: Forte Free Agent 1.1/32.230
    Xref: kcbbs soc.culture.new-zealand:44957 nz.general:60565
    Last week, someone at my work was silly enough to go to Dick Smith's,
    pick up one of those Telecon Xtra free install disks, and install it
    on one of the firm's computers. It stomped all over the existing
    version of Netscape, and when it was installed, it wouldn't allow us
    to log on to our ISP. We tried uninstalling it, but to no avail. It
    kept on telling us that it wouldn't log on for security reasons. We
    tried uninstalling both versions of Netscape, and re-installing the
    proper version, but the Xtra directory buttons were still there, along
    with the same problems. In the end we fixed it by deleting any files
    that were changed or installed on the the same day that the Xtra disks
    were installed. 
    So, if you are reading this, and are feeling charitable, you might
    like to follow these simple instructions:
    1) Pay a visit to your nearest Dickhead Smith's store.
    2) Grab the whole box of Xtra free install disks.
    3) Throw them in the dustbin.
    Have a nice day.
    Telecon Xtra. Don't just say no, tell them to stick it up their arse.

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