Telecom 'risking boycott' by changing Centrex metering

Plans by Telecom to change the metering of its Centrex business service could lead to a customer boycott.

Telecom risks a boycott of its central business district services if it carries through on plans to move the goalposts on metering of its Centrex business product, according to one ISP.

A Telecom spokesman has confirmed to @IDG that the telco is working to close a loophole in the free group calling item in Centrex, which is providing a boon for some ISPs but sucking revenue out of Telecom’s leased line business. The solution could have implications for all data traffic across the PSTN.

Telecom’s Arjen Maarleveld says work is going into changes in billing software to distinguish data and voice traffic on Telecom’s network, because “our view is that data is not what Centrex was designed for--it was an unanticipated byproduct. It’s an area of concern for us, because the long calls associated with Internet use don’t sit well with it.” Any change is a number of months away from implementation, but once data metering was in place it could in theory be applied to residential telephone services.

David Dix, director of KCSS, an ISP which specialises in corporate business and makes heavy use of Centrex ISDN, says if Telecom changes the rules he will remove all his business from the telco immediately, including about $400,000 a year with Netway.

“I expect most of my sites would do the same--including some major corporate customers who spend a lot with Telecom right now. Telecom simply will not get this back as DDS business. We’re already set up to use Telstra short-range radio in the CBD, and most of my customers would switch their telephony business to Clear.

“They’re saying that data does not sit well on a data circuit? I’ve never heard anything so ridiculous. It’s a pure money-making venture.”

Other ISP spokesmen, including NetLink’s commercial manager, Stuart Wilson, are more sanguine about Telecom’s plans. Netlink’s customer use of Centrex ISDN is “in the 10s”, says Wilson “but we aren’t relying on it--we’ve been expecting them to change it for the past 18 months now. Our experience is that it doesn’t go very well anyway--we’ve had a lot of trouble with it. I think Telecom has a real problem with both ISDN and normal dial-up, because they’ve based all their models on voice.”

Centrex allows businesses spread across several nearby locations to be placed on one group at a local exchange. It has particular implications for ISDN customers, because of the way Telecom’s exchanges are configured. If two ISDN lines terminate at the same exchange, they can be placed on a single group under Centrex ISDN.

Once this is done, Telecom is unable to monitor traffic over the ISDN line and can only levy monthly charges for the line and for the group service. Acknowledging that Telecom does want to divert customers to its DDS services, Maarleveld says DDS becomes cost-competitive over ISDN after three hours’ usage a day. But under Centrex a 128Kbit/s ISDN line then costs only $133 a month, as opposed to Telecom’s charge of $900 a month for a 64Kbit/s digital leased line.

Because Telecom still has relatively few ISDN-capable exchanges, quite distant business can terminate at an exchange such as Mayoral Drive in Auckland and thus qualify for Centrex grouping.