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NZ DSL users fined $500,000

"Hang on" you're thinking, "Aardvark is confused and has gotten the title for today's column completely wrong".

Wasn't it Telecom who were just fined $500K for deceptive advertising?

Shouldn't that title read "Telecom fined $500,000"?

Well I've got bad news for you -- we're talking about exactly the same thing and here's why.

Who effectively has a monopoly on the provision of DSL services to the average Kiwi home and business?

That's right, it's Telecom.

So where do you think Telecom will find the cool half-million dollars it's just been fined?

Will it come from the pockets of those executives who were involved in the "Go Large" product design and launch?

Will it come from the bank accounts of those crazy marketing people who thought it would be okay to lie about the product in their advertising?

Of course not.

It will come from the same place that all of Telecom's revenue is derived: its customers.

And, if you use a DSL broadband connection, the chances are that I'm talking about YOU.

Clearly, the whole concept of fining a monopoly provider for transgressing the law is a farce because you know that they're just going to recover that money from the people] who were ripped off in the first case by hiking prices or foregoing price reductions.

Yes, if Telecom had some real competition in the DSL marketplace then things would be different. The pressure of that competition would preclude them from simply hiking margins to pay the fines.

However, here in NZ, Telecom has no effective competition. Even those who appear to be its competitors are forced to purchase wholesale DSL services from the monopoly player.

And thus we all pay.

So how do you dish out a penalty to a company such as Telecom when you know that it's going to be water off a duck's back and simply disadvantage consumers in the long-run?

Well here's an idea -- let's agree that in light of their very long (and seemingly unwavering) list of prosecutions for deception, they are simply not a company that is fit to be a part of the National Broadband Network.

Instead of fining them (ie: their customers) a paltry half a mill, let's simply say "sorry Telecom, you're not ethical or trustworthy enough to become a part of such an important piece of national infrastructure".

Now *that* would have an effect.

There are plenty of other players out there who'd jump at the chance to become a key player in the creation of the NBN and I'm betting that the vast majority of them have a far better attitude.

How many chances do you give a company?

• 2003: Telecom Mobile breached the Fair Trading Act twice
• 2005: Telecom convicted over the 0832 fiasco
• 2006: Telecom convicted over mobile phone deal
• 2008: Telecom convicted over Xtra marketing campaign
• 2009: Telecom convicted over Go Large deceptive advertising

Does anyone see a pattern here?

Clearly this is a company that can't be trusted to deal honestly and ethically with its customers and therefore should not be handed out taxpayer funds to help build the NBN.

How long before "the powers that be" wake up to this?

Or are there simply too many Telecom shares floating around in the portfolio of political decision-makers for my radical suggestion to be considered?

How do readers think Telecom ought to be dealt with, in the light of its long history of recidivism?

Does it really make any sense at all to fine a monopoly provider of a critical service when you know full well that the money to pay those fines will come from the pockets of the very people the law is intended to protect?

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