First pay your bill. Then you pay the fee for paying the bill!

Back in 1909, Britain's Times newspaper memorably reported, "Fog in Channel. Continent isolated." A century later Telstra's latest effort is much along the same ludicrous lines except that the end result will be anger rather then amusement. Why? Because what Telstra is actually doing is is imposing extra fees on customers depending on how they pay their bills!

Under the changes, bill payment methods that mean lower costs for Telstra will remain fee-free, whilst some other payment methods (that according to the operator result in it incurring higher processing costs) will attract new or increased fees.

Telstra says fees charged for the processing of account payments are"completely consistent with industry practice in Australia", and a check around Telstra’s competitors confirms that they too charge their subscribers for some bill payment methods. But, whilst the incumbent Oz telco may be doing no more than jumping on the bandwagon already happily occupied by rival service providers, the PR spin being generated is disingenuous in the extreme.

Commencing on 14 September 2009, Telstra will charge a A$2.20 (US$1.80) administration fee for each bill payment sent by mail or made in person at a Telstra Shop or at an Australia Post office unless a specific exemption applies.

The existing credit card payment processing fee (yes, of course Telstra already charges extra for those who opt to pay by credit card) will increase to one per cent of the payment amount for MasterCard, VISA, and American Express and to two per cent of the payment amount for Diners Club, plus, natch, "applicable GST" (general sales tax).

As a sop, Telstra is trumpeting that customers can pay bills "for free" from a savings or cheque account via one of Telstra's three direct debit options or via BPAY®, a direct debit system operated Australian banks.