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11 posts

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  Reply # 46709 24-Sep-2006 00:25
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bradstewart: yes, it is a double standard. The difference is that a close-to-monopoly incumbent  can abuse its market position with "predatory" pricing and force other players out. (Damn it, will have to go and look up the legal side of this now! Smile)

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  Reply # 46710 24-Sep-2006 00:32
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10layers: bradstewart: yes, it is a double standard. The difference is that a close-to-monopoly incumbent  can abuse its market position with "predatory" pricing and force other players out. (Damn it, will have to go and look up the legal side of this now! Smile)


Wait wait, so what your saying (pending legal look up Tongue out) is Telecom are not allowed to match Orcons $19.95 internet plan if they wanted to... seems hardly fair?







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  Reply # 46711 24-Sep-2006 00:37
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Of course not, Telecom must be held down and beaten with a large stick!! Geez let the little guy kick the crap outa the big guy and steal all his bread

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  Reply # 46712 24-Sep-2006 00:48
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It is covered by the Commerce Act 1986. Parts of this act protects against practices that lessen competition, price fixing etc.

IANAL, and cannot for sure say that it is illegal for Telecom to sell below wholesale price. However, given the current regulatory environment, it is probably not a smart move.

And yes, there are absolutely things that smaller players can do, that the market dominant players cannot. Fair or not is not the issue here, it is the law.

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Reply # 46713 24-Sep-2006 02:18
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IANAL... What an unfortunate acronym.


Anyway, if the law is not fair then the law is wrong...


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  Reply # 46728 24-Sep-2006 08:58
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bradstewart: Well, fair is not always an easy thing to define. For example, Telecom could sell many or all of its retail services below its wholesale price in order to push competitors out of the market. Is this fair? What if XTRA sold all of its broadband plans below wholesale price? Would that be fair?

The reason ORCON is selling its low-end plan below costs is probably two-fold: 1) as a loss-leader in acquiring tolls customers, and 2) knowing that 200MB of volume allowance is essentially unusable and that customers will upgrade to products with a positive margin. (True for TNZ 200M plan as well of course.)

ORCON would propably not be able to do this if Telecom XTRA was selling all of their plan below wholesale rates.

But as I said, I am not a lawyer. (Better stay away from the acronym, I guess.) If it indeed is against the law for a dominant player to sell below wholesale price, this is certainly "unequal" treatment of the market players. The question is, I guess, is this unequal treatment "fair" in the respect that it allows a "fair" Telecommunications market to exist/be established?

If there indeed is a lawyer listening in, I would be very interested to get a legal opinion on this...

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  Reply # 46729 24-Sep-2006 09:17
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*10layers*, so what your saying is, all Telecom wholesale customers should lower the prices they charge consumers, forcing Telecom to match their offers, and therefor be required to lower their wholesale price?

PC gone mad......







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  Reply # 46730 24-Sep-2006 09:45
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NZBNW: not sure what you are saying...

The only thing I am trying to say is that it is _probably_ illegal for Telecom to sell retail services below wholesale prices and that its resellers could complain to the commerce commission.

I am not trying to imply any fairness here either way: towards Telecom or towards resellers. I am just highlighting what I think the law says and why.

(Similar "treatment" obviously exist in the OS world as well. Microsoft have been in trouble for bundling Explorer and Windows Media etc in the past. Smaller players, like Apple, have never had to worry about this. Despite the fact, that Apple obviously bundles Safari and Quicktime.)



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Reply # 46733 24-Sep-2006 10:30
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PTC



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  Reply # 47479 4-Oct-2006 08:45
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HEHE looks like I have hit a sensitive nerve :)..and to think all I wanted was some info on which ISP's people recommend

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  Reply # 47864 7-Oct-2006 21:30
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PTC: HEHE looks like I have hit a sensitive nerve :)..and to think all I wanted was some info on which ISP's people recommend


Well, its the most common and sensitive question hovering this forum.

Take your internet time back to 10(or 5) years, that would be your expectation from NZ ISPs.

Ihug, TNZ, Clear.. not much difference, NZ is island very far away from old world.

Please take a walk, enjoy fresh air and scenary while downloading.

It's all may be intentional from DHB...



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  Reply # 47931 8-Oct-2006 21:31
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bradstewart: But its ok for a reseller to sell below cost? Isnt that something of a double standard?
It definitely is... kind of...

The problem is... if I was making tubs of icecream (my cost $3), and selling them to you for $5, and we both sold them in our shop for $7... then everyone is happy.

Now, you can sell the ice cream for $4 for a couple of months to get people in the door, or maybe you subsidise the ice cream with sales of video games. Fair enough. You're doing what you can to increase your business.

I can also sell the ice cream for $4. Forever. I'm still making $1 so what do I care about cross subsidisation? In fact... I could sell at $4 and increase the wholesale price to $6... I do LIKE resellers, they give me alot of money :)

It IS a double standard, but one that's difficult to avoid. Telecom might really want to cross subsidise internet costs from their phone calls, but if it was allowed it's a real slippery slope.

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