Iprolink not fussed by Telecom numbering move

While man ISPs are up in arms over Telecom's new numbering system for data calls, Auckland-based Iprolink can't see what all the fuss is about. 'It seems to me this shouldn't affect the customers at all,' says director Jim Benson.

While man Internet service providers (ISPs) are up in arms over Telecom's new numbering system for data calls, Auckland-based Iprolink can't see what all the fuss is about.

"It seems to me this shouldn't affect the customers at all," says director Jim Benson. He believes the move is aimed at larger ISPs, like ClearNet and Ihug, as a way of avoiding termination charges.

"Telecom's agreements with other telcos require Telecom to pay about 1.75c/minute (rising to 2.0c/min in 2000) to the other telco for every call they terminate. With Clear Net and IHUG and several other ISPs using Clear-supplied dial-in numbers, Telecom is currently having to pay Clear millions of dollars a month to effectively subsidise these other ISPs," writes co-director Craig Anderson in the nz.comp newsgroup.

Iprolink's point of view seems to be that removing all the termination charges completely will be good for the New Zealand Internet community and users in particular.

Telecom must pay Clear every time a user connects to the Net using one of Clear's numbers. Anderson says this amounts to around $25 million a year for Clear and ISPs that connect through Clear, like Ihug.

Under the 0867 scheme, none of the calls would incur these charges as the termination charge agreement doesn't include new numbering schemes.

Anderson believes the move to 0867 numbers "seems reasonable, [given] there are much worse scenarios that Telecom could have introduced".

Anderson is also not worried about Telecom charging for 0867 numbers in the future.

"It's unlikely that Telecom is using this as a path to introduce per-minute call charges to ISPs . This would be difficult enough with hundreds of thousands of customers connecting to the Internet - per-minute charges would not be politically possible."

But Ihug's directors aren't so sure. "At the end of the day there is no fundamental change. We've still got the same circuits delivering the same stuff. There is no physical change to the network," says one of the Ihug directors, Nick Wood.

He believes Telecom is using the issue of congestion to push ISPs into a new scheme instead of paying to upgrade the infrastructure.

"The congestion they're trying to protect us from is at the local exchange level. Central exchanges are always built up on an ongoing basis. If you've got a user in Takapuna they'll be taking up a piece of copper from their home to a port on that exchange."

Wood says 0867 doesn't change this at all- the call still occupies a port at the local exchange.

"Their flat-rate move has created a huge extra demand for those ports. Suddenly there will be a lot more people using the service and that congestion will exist unless Telecom adds to the infrastructure."

Telecom spokeswoman Linda Sanders says Telecom has been spending money on the infrastructure - $4 billion on network upgrades since 1991.

"Our capital expenditure as a percentage of revenue last year was above France Telecom, British Telecom and Deutsche Telekom, for example." Wood says most of the money has been spent on items like the cellular network or Southern Cross cable project rather than internal infrastructure.

"The call still has to go in the exchange on one side and out of the other side to us. It's a simple matter."

Wood cannot see how this will in any way, shape or form fix the congestion issues with the infrastructure.

"In reality it's just a drive from Telecom to control how the Internet is delivered in New Zealand."

He says IPNet is not priced in a way that is competitive. "We use it because it's useful in some areas, but we lose money on it and could never make money from it."

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