Pricing system may reduce congestion

Press, 24 February 1988, Page 28

Pricing system may reduce congestion

PA Wellington A changed pricing system by Telecom Corporation could be used as a level to reduce pressure on the telephone network. The corporation is looking at charges for local calls and reducing or eliminating cross-subsida-tions, where more expensive toll calls underpin domestic services.

Overseas, most countries charge for local calls, rather than simply charging a rental as in New Zealand. Calls are either timed, as in Britain, and charged accordingly, or there is a charge for each call, regardless of the time taken.

In Australia, the Labour Government recently lost a by-election in a state seat where a central issue

was a proposal to charge for calls on a time basis. Australian calls are still charged at a flat rate.

The chairman of the Telecommunication Users’ Association of New Zealand, Mr Terry Ballard, said network congestion was a problem.

One solution would be to let business users buy lines rather than lease. This would take pressure off the network and improve security for data transmission. He said the Touche Ross Report presented to the Government in December pointed out that leased lines here were expensive on a world basis. Use of the network had boomed with the use of facsimile machines and modems, as well as data

traffic. Users wanted Telecom to give a choice of paying either a rental alone or a lower rental plus a charge for calls. Charges for calls could be graded in terms of the distance involved. Relationships between users and Telecom were generally good and he hoped that there would be discussion on the new charging options. Voluntary associations are expected to react with apprehension to the new system, in spite of the assurances by the Post-master-General, Mr Prebble, that costs will come down. The chairman of the Aged Concern organisation, Ms Erica Brodie, said that charging for local calls would be another thing for the elderly

to worry about. They already had a variety of rising costs to face.

The telephone was a lifeline for the elderly in keeping in touch with family and friends and was a critical tool for helping agencies. The Post Office Union said costs for domestic subscribers had increased dramatically in countries where deregulation had been introduced. In the United States, local calls had risen as much as 50 per cent. In Britain call charges had gone up 20 per cent.

New Zealand has a heavy use of telephones, when its 2.3 million phones are compared with the population — the fifth highest use per capita in the world.