Ihug ponders curb on "endless Internet"

Ihug is considering putting a bump in the flat-rate Diamond account on which it built its business.

The company has emailed about 170 customers who have been using the flat-rate "endless Internet" account for 600 to 700 hours a month, warning them that it is considering imposing a 350 hours a month limit, possibly loosely combined with a 12 hour a day benchmark similar to that applied by Xtra to its flat-rate account.

With all other Ihug consumer accounts now charged by time or volume over certain limits, such a change would see the end of unlimited-use accounts at the ISP that pioneered the concept in New Zealand.

The change reflects sharper competition on price and service since Xtra and Clear Net entered the flat rate market - and the dwindling tolerance for customers who use dial-up accounts as permanent connections to the Internet.

Postings to the ihug.general newsgroups briefly outstripped those to nz.general as Ihug customers piled in to have their say on the proposal this week, but while some were outraged that Ihug was seeking to change its terms, others were happy to see extreme users reigned in.

A similar furore accompanied Ihug's decision to place volume limits on its high-speed Satnet consumer accounts last year - a move also aimed at very heavy users - but Satnet performance has improved markedly since then.

Ihug director Tim Wood says "there was a whole lot of yelling and screaming initially but I think most people have now understood what it's all about. It doesn't really change the nature of the account, it just spells out what a permanent connection is.

"We haven't actually changed the terms and conditions - we just wanted to see what sort of reaction [the idea] got. But there most likely will be some change.

"It allows us to deal with those heavy-end customers who exhaust system resources. How we police is thereafter is at our discretion but at least the definition's in there."

Clear Net has no formal conditions on its flat-rate account but says its plan does not entitle customers to a "permanent Internet connection" and reserves the right "to disconnect users who in our sole opinion have been connected or inactive for an unreasonable period." Xtra's terms and conditions note that its flat-rate account does not mean an indefinite connection and it reserves the right to disconnect customers after 12 hours online or 15 minutes' idle time.

"It's kind of necessary for an ISP these days," says Wood. "It's very competitive and you have to maximise your resources. We're running at a 1-6 or lower modem ratio and we want to balance the numbers up a bit.

"The only way to do that is to make sure that the heavy users who are caning your system come into line - or go elsewhere. I won't be crying if they go away."