The full picture of the New Zealand Internet industry is “yet to unfold”, according to one of its more controversial players, Voyager managing director John O’Hara. Yes, he says, it will be interesting to see which market sector Clear’s Internet offering sets its sights on, but no, he doesn’t believe the telcos are driving his industry. (For the full interview on which this story is based, see this week's Friday Fry-Up.)
For his own part, O’Hara says he’ll simply do what’s best for the company he part-owns--even when that means censure from the fledgling Internet body he helped to found. Such was the circumstance when the Internet Service Providers’ Association (ISPANZ) endorsed a statement by the Internet Society (ISOCNZ) criticising the behaviour of both Voyager and Telecom Xtra in the “ISP wars”.
“I’ve got two roles,” says O’Hara. “If I’ve got my Voyager hat on, then I must act in the best interests of Voyager. If I’ve got my ISPANZ hat on I must act for ISPANZ. If ISPANZ decided to censure or take some action against Voyager, I would remove myself while that discussion took place.”
O’Hara rejects the suggestion that many, if not most, people involved with the Internet here felt Voyager had gone too far when it used the finger command to extract 10,000 email addresses from the Xtra mail server and then “spammed” them with a promotional message.
“No, not most people. I think even within ISPANZ there are two schools of thought. Some people clearly view it as a breach of netiquette and therefore inappropriate. Others view it as a form of direct marketing activity, which is the view that we took.
“From our point of view we saw that our customer base was being carpet-bombed by Xtra newsletters through the telephone accounts. Our customers didn’t consent to that, they didn’t ask to receive that information and they weren’t given any way of being taken out of that mailing. So we reserve the right then to communicate in the way that we can.
“I think it was very silly of Xtra to leave finger open. It’s exposed their customer base to unsolicited email from anyone on the Internet. A number of ISPs in New Zealand to my knowledge have compiled databases of their customer base. I don’t know about beyond New Zealand, but it’s quite likely that other people outside New Zealand will have done that also.”
O’Hara maintains his company tried to be “very responsible” about his unsolicited mailout to Xtra customers.
“We made it a very short message and put the rest of the message up on a Web page, so that it was not a big message for people to read, and we gave them a very simple way of getting off the mailing list. We sent it out to 10,000 people--at the time we compiled the database we think that was about three quarters of the Xtra users at that time. Of those 10,000 people, less than 300 asked to be taken off the mailing list and about 20 of them could described as thermonuclear about it. So I don’t think the users have expressed the same degree of indignation as some commentators have. But everybody has different view--that’s what makes life interesting.”
ISPANZ’s role in disputes between Voyager and Xtra has been called into question by some ISPs, who feel it lacks broad credibility and accountability for policy--a view endorsed by Tyler, who recently declined an offer to join the body. O’Hara insists that ISPSANZ is not a front for Xtra’s main competitors.
“It tries very hard not to be that. Telecom was invited to join. Clear asked to join and were told they were welcome to do so. The policy is decided that the moment by a steering group which is made up of four people--which is myself in Auckland, Ron Woodrow from Iconz in Wellington, Robert Hunt from Plain in Christchurch and Greg Sheehan from Dunedin. So that’s the steering committee until the formal elections and constitution are incorporated and that sort of thing. And I think as far as ISPANZ is concerned, we’ve all tried pretty hard to be very objective and professional in what we’ve done.”
The fact remains that the target of almost all the ire of ISPANZ and Voyager has been Telecom and Xtra--and Xtra’s pricing in particular. But surely--as Tyler contends--if Xtra had not stopped into the mainstream end of the market, O’Hara would still be cheerfully charging newbies $10 an hour?
“I don’t think we would have been charging $10 an hour--but I think the point about Chris’s argument is that he had admitted Xtra is selling below cost. Jeff White, Telecom’s financial controller is quoted in the Christchurch Press last week as saying that they don’t expect to be profitable until 1999.
“On the calculations we’ve done, we estimate Xtra is losing about $1.2m a month. Now, there’s a difference between selling at a sustainable price, which is in the best interests of consumers, and selling below cost, which is rarely in the long-term interest of consumers. Not many companies are known for their largesse in selling below cost for a sustained period of time--unless perhaps there’s an agenda stacked behind it that’s yet to unfold.”