Telecom calls off big rural fee rise

By ROSALEEN MacBRAYNE

Telecom has backed down from plans to raise fees for new rural connections after widespread public outrage.

The top fee for a new line will now be $500, down from the $1500 to $4000 proposed earlier this month. But about 120 customers a year who fall into the "high cost" bracket will still pay a third of the price of extending the network to allow a new connection.

The company's 16,000 new connections a year now cost $61.

Telecommunications Users Association chief executive Ernie Newman applauded Telecom's change of heart yesterday and welcomed assurances that the potential lost income would not be recouped in other charges.

However, Mr Newman voiced concern about Government "intrusion" in what was essentially a commercial matter.

As many as six Cabinet ministers had met Telecom behind closed doors about the proposed fee increases, shutting out other telecommunications companies from discussions, he said.

"Arguably they were giving Telecom an unfair advantage. We wouldn't like that to become a precedent in the way the Government does things," Mr Newman said.

"There should be a lot more transparency."

Telecom chief executive Theresa Gattung said the company had had a "rethink" about the 1000 to 2000 customers most affected by its proposed changes.

Under the revised pricing structure, the new connection fee will be capped at $500 for people in areas with a population of less than 1000. In a medium density area (1000 to 10,000 people) the connection fee will be $250 and in a neighbourhood with more than 10,000 residents, $95.

Ms Gattung said customers who genuinely could not afford more would be charged the standard $95 charge for a connection.

The assessment would be made by an independent budget advisory service.

Federated Farmers president Tom Lambie said Telecom's backdown was largely "window dressing" and there was still no guarantee of a phone connection.

"Basic telephone services are essential in today's business environment, quite apart from issues of health and safety for those living in rural areas," he said.

Green Party co-leader Rod Donald said Telecom was still profiteering with its decision to keep charging the same amount for second phone lines as for new connections, while using existing cabling.

He said a universal charge should apply to every customer, whether they lived in a city, a small town or the country.