THE PRESS SATURDAY, FEBRUARY 20, 1988. A tax on talking

Press, 20 February 1988, Page 22

THE PRESS SATURDAY, FEBRUARY 20, 1988. A tax on talking

A charge for local telephone calls now seems inevitable unless the volume of public outcry is great enough to deter planners or persuade politicians to bring pressure to bear. The Minister for State-Owned Enterprises, Mr Prebble, is an enthusiastic supporter of charging for local calls. He says that he expects most telephone bills will be lower over all once the new charging system is introduced. This assertion will arouse deserved scepticism. The Touche Ross report, commissioned by the Government and used by it as justification for removing Telecom’s monopoly, argued that a purely cost-related tariff could result in some subscribers paying more than 10 times their present rental. Provision of communication is a basic public service (even if communication by letter has become more difficult in the many communities that have had their post offices shut). But it seems that in respect of telephones, too, the social service aspect will be sacrificed to narrow definitions of efficiency and profit. A telecommunications policy should not be pursued regardless of profit; but there must be consumer safeguards. These have to take into account reasonable demands anywhere in the length of this elongated and sparsely populated country, particularly the need for public call boxes, emergency services, and services to rural areas.

The impetus for local call charging arises from the greater use being made of

telephone lines for linking computer and other electronic data systems. According to Telecom, some companies are connecting computers by using free telephone calls and tying up those lines for 24 hours of the day. This might be so; but why should pensioners, the house-bound, and others for whom the telephone is an essential link with the rest of the community be forced to measure the cost of every local call, or even whether the call should be made? If there is a problem with computer-using businesses, the solution surely lies in a review of contracts with them, not in upsetting the fixed rental system for private telephones.

Telecom, which returned a profit of $327 million last year, will have to show conclusively that a change to local call charging will mean significantly cheaper telephone bills for most people — and beyond a transitional period, too — if it expects enthusiasm from subscribers for the change. Mr Prebble was not convinced of this last year, when he said that the Government would monitor the social impact of Telecom’s pricing policies. Increased prices, he said, would be “reflected in the consumer price index which will, in turn, feed into benefit reviews.” One in four adult New Zealanders might be in receipt of some form of welfare benefit, but reasonable access to what is a basic form of communication should not rely on a subscriber’s willingness to become a welfare beneficiary.