Telecomms structure stymies Internet growth

Two things need to be addressed by New Zealand if we are to proceed into the next century with our economy intact.

Two things need to be addressed by New Zealand if we are to proceed into the next century with our economy intact. The first is our telecommunications network and the second is our stance on privacy and security in an electronic age. Both are fundamentally important and can only grow more important as we conduct more online transactions. These two issues are linked at a kind of primordial level — like the brain and the mind, or the instrument and the music. They are intertwined in such a way that they form something much greater than the whole. If we want to take advantage of the opportunities offered by the information age then we have to sort out these issues as soon as possible. The first, telecomms (I’ll cover security and privacy next week), is probably the most obvious at this time, especially in New Zealand. Telecom has made the first move by introducing its 0867 numbering scheme. While we in the audience gasped at such an audacious move, the referee has checked the rule book and solemnly nodded his assent. Last week I received a phone call and a letter from Telecom pointing out that while Telecom may well have access to demography on ISP customers under 0867, it’s always had this information and has never used it. While its access to information is restricted to knowing when a user is online, apparently, this is not something that is shared with the sales and marketing people at Telecom or its ISP, Xtra. I have spoken with a number of ISPs who are suspicious of Telecom’s operations in this area. One says Telecom had approached at least two of its customers with deals specifically targeted at them to lure them over to Xtra. Another says he cannot say for certain that Telecom was using the information to woo his customers, but that it was "extremely coincidental" that Telecom seemed able to craft deals aimed at his most profitable customers. I spoke with Telecom’s manager of industry services, Bruce Parkes, who says the New Zealand market is quite small and that Telecom, of course, targets its competitors’ customers but that Telecom never uses the information and doesn’t need to. This issue undermines trust in the structure of e-commerce in New Zealand. How can we expect customers to flock to our sites if there are doubts about the basic network itself? The solution is simple — Telecom should not be in this position. Telecom can be a phone company, it can be an ISP. It can do content, lay cable, offer Web hosting, e-commerce advice and so on, but no one company should be allowed to dictate how New Zealanders interact with the Internet. It’s too important to allow one profit-driven organisation to do that. Telecom’s management is beholden only to its shareholders to make money for the company — the rest is window dressing. It is under no obligation to provide a safe and secure "level playing field" for e-commerce development unless it makes money for Telecom. Government created this mess 10 years ago when it sold Telecom off lock, stock and local loop, so it has to fix it. I favour the creation of a telecomms office, similar to Britain’s Oftel, which would rule on such issues in as speedy a manner as possible. Regardless of who wins the next election something will be done. Labour will launch a full-scale inquiry into Telecom, as well as revamping the Commerce Act to give the Commission more teeth. National will require Telecom to open its local-loop books to scrutiny for the first time ever. You can tell there’s blood in the water because the sharks are circling — there’s been a lot of offshore interest in New Zealand Internet companies and the telecommunications market in general over the past few months and I expect that will continue for a while yet. Telecom is rapidly trying to expand its power base into Australia and that’s as sure a sign as any of which way the wind is blowing. Paul Brislen is Computerworld’s Y2K  reporter. He can be reached at, or phone: 0-9-377 902. For publication copy letters to

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