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Beware the creeping cost of broadband

Beware the creeping cost of broadband

With all the optimism surrounding the brave new world of broadband now that the government’s got tough on Telecom (and if anyone’s spotted any real progress, will they please let me know), I was surprised, astounded even, that my own bill for high-speed internet access is about to go up.

Yep, if I continue to receive the exact same service next month as this, my ISP, Ihug, has decided to charge me $1.50 more. That’s a 2% rise for my own particular package — or a 6% increase for the cheapy-cheapo $29.95 ‘pay as you go’ option.

The reason? Ihug has decided to switch to email billing and charge any old farts who still want to receive paper bills $1.50 for the pleasure.

Now, I get the thinking behind electronic bills supposedly being kinder to the environment — being greenish at heart, I have a definite lean in that direction. The reality is, however, I’ll still have to print out a copy to keep my accountant happy, which kinda blows this argument out of the water — for me, anyhow.

Ihug goes on to cite a few other reasons behind its e-bill rationale:

1. “Your bill will arrive quicker than if it were posted” it states proudly. Er, and getting my bill quicker is good news for me because …? No, I didn’t think that one would wash with you, either.

2. “We’re an online company, so it just makes sense for us to communicate online!” Well, yes, I guess. I just hope Air New Zealand doesn’t start sending tickets by air courier — I don’t think there’s enough room to land a 747 in our street.

3. And, get this, “You can still print your bill out if you need”. Great, thanks for that.

The choice of $1.50 is also interesting.

“The figure was chosen to incentivise customers to make the shift from paper to online billing,” said the company’s PR and communications manager, Cherie Lacey. “It also covers printing and postage costs. The figure, we believe, nestles somewhere between providing enough incentive for people to change, while not breaking the bank of those wishing to continue with the traditional paper bill.”

Okay, it’s an incentive. But my question is this: why choose to charge customers ‘more’ to change their habits, as opposed to offering them some kind of a discount? Knocking money off usually acts as a pretty good incentive, too.

The answer, it seems, is that for all the environmentally friendly, quicker-sent-bill arguments, this is a cost-cutting exercise.

“Broadband just doesn’t have the profitability to be able to justify subtracting $1.50 from every online billing customer,” added Lacey.

Is it illegal to charge for a paper invoice?

Apparently not. A quick call to the Consumers’ Institute confirmed — they think — that there’s no legal requirement for a ‘paper’ receipt-cum-invoice. As long as the electronic format contains all the necessary info, like amount, GST number and so on, then it’s kosher. It seems Ihug’s well within its rights.

Is it good business practice?

Well, time will tell.

Sure, I understand things are tight in the broadband business and every cent counts. All I can say, though, is that during the course of writing this column, I took the chance to reassess my own account and have actually cut back on what I get as I wasn’t using the extra download allowance. So, there’s a $10 saving for me … or a $10 loss for Ihug, depending on how you look at it.


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