Telecom changes don't go far enough

Telecom's backdown on exorbitant charges for new telephone connections was welcomed by Green Party Co-Leader Rod Donald today.

But Telecom was still profiteering with its decision to keep charging the same amount for second phone lines as for new connections, he said.

Telecom today announced its revised pricing structure for new telephone connections, capping the fee at $500 for most customers; in response to pressure from the Green Party, other politicians, local authorities and the public. However, high-cost connections would remain at one third of actual cost, so could be significantly higher than $500.

"I am pleased Telecom has listened to public outrage at the excessive charges," Mr Donald said, "but the Green Party still believes a universal charge should apply to every customer, whether they live in a city, a small town or the country.

"We are still outraged that Telecom is determined to sock it to existing customers by up to $500 to put a second line in the same home or an adjoining building. It smacks of profiteering.

"There's no way Telecom can justify charging $500 to put a second socket on the wall when they are using the existing cabling for the second line. They should recover capacity costs through their monthly rental charge."

Telecom's proposal to effectively "means-test" customers who could still not afford the new connection fees was also potentially concerning, Mr Donald said. "While it's good they're offering people on the lowest-incomes the opportunity to pay the lowest fee, it will be interesting to see how people's ability to pay will be tested. I'll be keeping an eye on it to ensure it's a fair test."

In today's announcement, Telecom said customers who could not afford the new standard connection fee would pay the lowest fee of $95, but would first have to be assessed by a "respected independent organisation". Telecom advised the Green Party today the detail of the assessment process had still to be worked out, and would probably be determined by the independent organisation.

Telecom also advised the Green Party that new connections of a second phone line for an existing home or adjacent building would still be charged at the same rate as a first connection. The relevant cost was the cost of adding the capacity of that additional phone line to the network, Telecom said. So if a homeowner in a low-density area installed two phone lines, the phone lines would cost $500 each.

ENDS

© Scoop Media