While most New Zealanders were on holiday Telecom increased the line rental charges for phone users and cut off non-Xtra account holders from their POP3 servers.
Line rental charges were raised from $38.05 to $39.30 including GST per month for most New Zealanders, but those fortunate enough to live in areas where TelstraClear has its own competitive offering will only be paying $32.40 per month. Telecom says this rise is due entirely to internet usage.
"Approximately 80% of free local calling volume is made up of free dial-up internet usage, which is ever-increasing. This situation continues to drive up the cost to Telecom of providing this service," says group marketing manager consumer Sandra Geange in a written statement released on December 27.
“Back in 1997, residential customers were spending an average of 640 minutes a month making local calls, and paying a ... rental price of $35.87 a month. From 1 February 2003, the majority will be paying $39.30 a month while today, residential customers spend on average more than double the time they were spending in 1997 making local calls – an average of 1412 minutes a month.”
Telecom is required to offer free local calls under the Kiwi Share agreement, now called the telecommunication service obligation (TSO). Telecom can only increase its line rental charges by the rate the consumer price index (CPI) increases each year. In 1992 Telecom threatened to increase its line rental by more than the CPI because of pressure on its profit from toll calls and the arrival of Clear Communications as a major competitor. Company secretary Martin Wylie told Computerworld at the time that free calls were costing Telecom $250 million a year. Wylie is now managing director of ISP Ihug.
Just before Christmas Telecom's ISP Xtra began blocking access to email from beyond its IP range, effectively cutting off any email users that accessed their Xtra accounts from another ISP using POP3 protocol.
Xtra's marketing manager Chris Thompson says the company has blocked "popping from outside the [Xtra] IP range".
Customers who were using an Xtra email address but a different ISP were in effect being subsidised by other Xtra users says Thompson.
Users accessing their email through the Xtramail website are unaffected.