Free Internet Rival Threatened By Telecom

MEDIACOM-RELEASE-I4FREE

FREE INTERNET RIVAL THREATENED BY TELECOM

Telecom New Zealand is threatening to pull the plug on New Zealand's first completely FREE Internet Service Provider on Monday (April 3), the day the new service will be launching to the public.

The i4free.co.nz service, which will offer New Zealanders completely free unlimited Internet access for the first time, and is modelled on overseas success stories. Over 500,000 Australians already enjoy free Internet access and one of the largest ISP providers in America is free and has more than 3 million customers.

Free ISP services work by carrying advertising, sponsorship and affiliated shopping partner links. These arrangements cover the costs, just as advertisers pay for free-to-air radio and television.

Annette Presley, Chief Executive Officer of i4free.co.nz says "Telecom has written letters threatening to disconnect the access lines which i4free will be using, which my lawyers believe to be a clear breach of section 36 of the Commerce Act."

"Our group has spent upwards of one million dollars establishing this business to date with the aim of bringing New Zealanders a service that Australian's have been able to benefit from for nearly a year"

"What Telecom are trying to do would be simply illegal in Australia or elsewhere, but because of New Zealand's light handed approach to regulating the market they are able to abuse their size and power, to delay and sometimes stop, true competition from developing.

"They see the growth of free ISP services as a threat to their own subscriber Internet service Xtra, which they are hoping to float to the public. Clearly our success will erode the value of that."

Annette Presley said Telecom had sent out one of their executives posing as a customer relations employee to investigate more about the i4free service.

"What we thought was going to be a straight forward meeting to complete an 0900 number application form, turned into a situation where we were threatened about using Telecom's 0867 Internet connection protocols.

"She said things like: `we don't want to cut you off on the day you launch but that is what is going to happen if you don't comply now .. You have been warned, so don't be surprised when you get cut off on Monday morning.'

"The Telecom representative also said `we are doing something about it and our lawyers are working on this right now. We will be forwarding something to you.'"

Annette Presley says i4free will take Telecom to court if it does pull the plug on Monday to seek redress and damages.

"The main problem is that this type of action means that New Zealanders are falling behind when it comes to getting the benefits of decreasing telecommunication prices and new technologies, simply because the market here is not truly competitive."

"We have been told that other ISP providers have been discussing with Telecom ways of stopping the trend of free ISP's developing in New Zealand, and that some of them are considering putting blocks into their services so that their subscribers won't be able to access our web site."

"While any such anti-competitive behaviour will be a matter for the Commerce Commission, there will inevitably be delays and consumers will be the ones which suffer."

She says i4free will provide a truly free service with no connection fees, no set-up costs, no restrictions on the amount of use and no charges for email. In short, there are no financial obligations for the customer.

i4free already has local access numbers ready in Auckland, Wellington, Christchurch and Hamilton, and is looking to expand coverage to give users throughout New Zealand the benefit of free internet access through local telephone calls.

The company has an on-line sign-up procedure and the latest generating technology which will mean customers can enjoy high-speed downloads and easy connections. The free e-mail service is available immediately to customers and their webmail interface can be accessed anywhere in the world, without dialing direct into i4free. Sophisticated encryption systems ensure that privacy is maintained.

i4free will initially be restricting membership to 8,000 subscribers, primarily to ensure the quality of the service is maintained. i4free propose to have 100,000 subscribers using their service by the end of the year.

i4free is a privately owned New Zealand company that is backed by a number of corporate and individual shareholders in the telecommunications, data networking, Internet, advertising and direct marketing fields.

ENDS

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