Telecom first launched 0867 in June 1999 with very little fanfare or warning. ISPs were sent a letter outlining the new system.
“The introduction of this new service is a very important step by Telecom to manage for future impacts of Internet traffic on the telephone network,” the letter said.
0867 allows Telecom to re-direct traffic through its network in a more manageable manner, according to Telecom’s industry services unit manager, Bruce Parkes.
Calls made to an 0867-prefixed number would be picked up on arrival at the exchange and then routed directly to the ISP in question.
Users would be able to call the same number from anywhere in the country and be connected with their ISP, so long as that ISP had a point of presence in the area, without having to pay toll calls. ISPs would only need one number rather than the range of numbers they used.
“Because 0867 uses the Telecom Intelligent Network we will have a major improvement in our ability to efficiently manage Internet calls. This will include balancing load between exchanges”, said Telecom’s letter, which went on to say Telecom would be able to divert 0867 calls to another exchange if one was becoming overloaded.
“... and, in times of network overload or emergency, we can prioritise voice calls ahead of 0867 calls in order to preserve the integrity of the voice network,” said the letter.
It’s this last point that raised user ire when first mentioned: Telecom, in effect, unilaterally decided that voice calls were more important than data calls.
That, coupled with Telecom’s decision to charge two cents a minute for users who continued to call existing dial-up numbers, angered a number of ISPs.
“The costs to a small ISP like ourselves could be quite considerable,” said Mark Mackay, Internet co-ordinator at Digital Edge when Computerworld first spoke to him in June last year.
“We will lose customers because Xtra won’t have to charge as much and it'll be able to offer a better service.”
Xtra used Telecom’s IPNet to route its calls, accessed via the 0873 suffix.
Mackay said despite making several requests he hadn’t been able to receive an assurance of minimum quality levels from Telecom.
“There’s nothing to say if one exchange is overloaded they’ll put our users through to another. They say they have the ability to but they don’t guarantee it. Does that mean they’ll charge us for that as well?”
In June, Ihug’s director, Tim Wood, described IPNet as “moving your food around your plate to make it look as if you’ve eaten all your dinner”.
He said adding a new phone number to the front of the existing system wouldn’t make system management more efficient.
“If Telecom spent more money on the infrastructure we wouldn’t be having the problems with overloading that we are having.”
Despite initial Ihug resistance, it went on to sign a deal with Telecom to switch its customers over to 0867.
Matters were complicated by the Kiwi Share provision of its constitution, drawn up when it was first made into a state-owned enterprise and then sold off, in 1990.
The Kiwi Share provision lays out four obligations that Telecom must abide by, and it’s the first of those that caused concern. A “local free-calling option will be maintained for all residential customers”, says clause 5.2.1.
Many objectors to 0867 focussed on this clause saying the regime breached it by introducing the two cents a minute charge for those not complying, but Telecom disagreed.
The wording of the share does allow Telecom to introduces charges - “optional tariff packages which entail local call charges for those who elect to take them as an alternative” - but only as an option, and in the case of 0867 users are forced to switch to the new numbering scheme.
On top of that, Telecom argued that calls to an ISP aren’t covered by the Kiwi Share because the Internet wasn’t part of the “ordinary residential telephone service” in 1990.
“In our view it does not oblige Telecom to provide unlimited free data calls to the Internet” wrote Bruce Parkes in a letter to the Internet Society (ISOCNZ) dated June 30 1999.
He went on to say: “While Telecom may be entitled to charge for all local calls to the Internet, we have elected not to do this.”
The Crown Law Office (CLO), however, issued a statement last August that disagreed with Telecom’s point of view, saying it believed Telecom’s actions could be in breach of the Kiwi Share. Then communications minister, Maurice Williamson, over-ruled the CLO.
PC World columnist Geoff Palmer tried on two separate occasions to take Telecom through the Disputes Tribunal after receiving bills for calling non-0867 numbers. Telecom waived the charges after Palmer told them he would go to the Tribunal over the issue.
In a letter to the Principal Disputes Tribunal Referee on 29 June, Ronald Pol, Telecom's group litigation solicitor explained "that defending the few claims we have received would cost Telecom far more than their value – particularly in lost management time of the responsible business manager …"