gzt: just a guess, but I think you will find it is compliant with telecommunications and privacy act as long as you agree to it. Other than that it is obvious xtra does not comply with expectations as an email provider.
I imagine they would have no trouble aliasing your existing address (without passing through Yahoo's service) to a provider which meets your expectations. I have no specific knowledge but I think you will find they do this on a regular basis for business customers. It might be a bit new for home users but not difficult if xtra already have the facility.
I am not aware that Xtra have the ability to do this, doesnt all their @xtra mailboxes reside in Australia under Yahoo care? Yahoo states that even for POP access it is mandatory to sign to the new terms or quit.
Telecom themselves dont use Yahoo for their corporate email, no surprises there.
I've opened a Microsoft acct and transfered all my subscriptions to it and the Gmail acct for the more dodgy ones.
At this stage I dont care if those conditions are worse, it will be worth dumping Telecom to reduce the dozen spams I still get per day. being a customer since inception of the Mac service its a nuisance loosing my address but I have got over it and moving on.
Thanks for the comments. I really do think Telecom should have ditched Yahoo, and its been that way for a very long time.