SchoolZone subsidy doesn't distort competition – Ministry

Critic asks: are taxpayers paying twice?

The Ministry of Education has been careful not to compromise the competitive telecommunications market in subsidising elements of networking for schools, according to ministry spokesman Douglas Harre.

Telecom, one of four winners of a three-year contract with the ministry to provide firewall, network management and content control services, is using elements of its SchoolZone networking suite (Computerworld, August 16, p9, and August 23, p9) and has markedly lowered the cost of SchoolZone to the nation’s schools.

The company cites the ministry’s “bulk buying power” for being able to do so.

“From September 1 the price of Telecom's SchoolZone and SchoolZone Lite will fall by up to 60% for small schools and up to $366 per month [42%] for larger schools,” says Roger Sommerville, facilitator for Leadspace and the Principals Electronic Network, through which the Ministry communicates with school principals.

SchoolZone Lite, for instance, will cost from $149 per month for a school with less than 500 students (reduced from between $299 and $399). SchoolZone Full for a school with less than 100 students will cost $449 per month (reduced from $715). For a school with 100-499 students it will cost $499 per month (reduced from $800-$865) and for a school with 500-999 students, $549 per month (reduced from $890).

These reductions are a direct result of the subsidy, says Harre. “The other three [chosen] offerings are stand-alone products, but Schoolzone is a complete network management package. This deal means that of eight components in that package, we’re paying for two, so the whole SchoolZone offering gets cheaper.”

Questions have been raised, however, as to whether or not taxpayer-subsidised offerings are good for a competitive telecommunications market.

John Holley, information services manager with the Royal Foundation of the Blind and a member of a school board, suggests the exercise amounts to a taxpayer subsidy to make Telecom’s offering more attractive than rival school networking schemes.

But this is not so, says Harre. Schools who do not want to use the Telecom option could combine the alternative management and security offering from Watchdog with “TelstraClear, Ihug, Wired Country, or whoever they wanted to use.”

Because Watchdog comes free the cost of networking that way would also be effectively reduced, he says.

The contract for firewall, content control and network management tools, was openly tendered through usual government procedures on the GETS website, Harre says. There were 160 downloads of the request to tender document and about 20 eventual bidders.

Holley still sees some extra money flowing Telecom’s way as a result of the exercise, suggesting it should all be provided as part of the Probe initiative. “One could wonder why the government pays for services that it has subsidised Telecom [and other successful regional suppliers] to provide via Probe,” he says.

Holley also makes the point that the SchoolZone “content filter” does not properly live up to that description, since it only blocks websites.

Jonathan Beveridge at the Ministry of Education agrees that site-blocking technology is used rather than content filtering in the strict sense of the term. “However, the phrase “content filtering” is one that schools are used to and use when they refer to the concept of physical/technological intervention or inappropriate site access,” he writes, in an email to Holley. “Most schools that this project is designed to assist would not know the difference between these technologies.”

The ministry is not suggesting that the tools offered are a total solution, Beveridge says: they should always be complemented by “education and process” such as internet use policies and agreements. “We have assisted schools as much as possible to do this through the support materials created by the Internet Safety Group.”

“The [remarks] about education and process [are] fine,” Holley comments, “but for the cost of $US250 a school can have really good content filtering. All the agreements in the world are useless unless you back them up with technology.”

The alternative supplier Watchdog ( does not describe its product as a content filter. Its main function is site-blocking though it has some verbal filtering to trap offensive emails and web-searching for unsuitable material.

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