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Where's our discount? 14 September 2004 Edition
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Project Probe has resulted in millions of taxpayer dollars being handed out to large communications companies - mainly Telecom New Zealand.

In return for this money, Telecom (and others) are extending the reach of their broadband offerings into areas that might otherwise be considered not to be economically viable.

This is obviously a good thing for those living in such areas and for the nation's cyber-literacy as a whole, so there can hardly be any complaints from that perspective.

I'm left wondering however, why the many millions of dollars that have effectively subsidised (mainly) Telecom's broadband expansion don't earn customers (aka taxpayers) a discount on the provision of that service.

Telecom is quick to tell us all in their advertising that its JetSurf plans offer amazing value, being priced from just $39 a month but there's an awful lot of marketing spin and less than truthful hype in there.

For example: can you get the $39 a month JetSurf product without also paying around $40 a month for a telephone connection?

I think not.

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So, for the growing number of people who are happy to use their cellphones in preference for a land-line connection, Telecom's JetSurf actually starts at around $80 a month.

And what do you get for your $80?

Well bugger-all actually.

You get a measly 256/128K service that is only just fast enough to qualify as broadband and would not seriously be considered such in any other 1st-world nation.

You also get a miserly 1 GB of data -- an absolute joke -- that's barely 15 minutes of full-speed use per day.

Compare this to what's on offer in the USA. An Aardvark reader recently posted a link to this page in the aardvark forums.

Shocking isn't it?

You don't see anything less than a 5Mb/2Mb service there and it costs just NZ$61.50 per month with *NO* data caps and a data-modem as part of the deal.

But NZ's a small country and we don't have the economies of scale so it's unfair to expect Telecom to offer equivalent pricing right?

Well wrong actually.

Let's not forget that the taxpayer is currently subsidising Telecom's DSL expansion to a huge extent right now so they're in an even more enviable position than Verizon when it comes to the cost of creating a DSL network.

I'm also informed that DSL broadband pricing is not much higher even in smaller more geographically remote US towns and cities -- and this is still without taxpayer subsidies.

Take a look at this discussion for more about how NZ's broadband deals stack up.

I'm sorry but I believe the taxpayer is being ripped off by the current Project Probe funding system.

What we have now is not to dissimilar to buying a house for your landlord and then having to pay him rent in order to live in it.

Surely, if the taxpayer is going to stump up with millions to help pay for plant and equipment that becomes the property of Telecom, we should be entitled to recover some of that money by way of a reduced DSL pricing regime that offers at least some parity with other first-world countries.

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