A Converter is intented to convert from submitted String request parameter values to complex objects and vice versa in input fields. However, the <f:param> is pure output only and it will always call toString() on the value. It doesn't support a Converter.
Your cleanest and best bet is to create a custom EL function, so that you ultimately end up like:
<f:param name="name" value="#{util:prettyUrl(name)}"/>
Update: the JSF utility library OmniFaces has since version 1.4 (March 2013) a <o:param> component which extends the <f:param> with support for a fullworthy JSF converter, exactly like as you'd use in <h:outputText converter>.
<h:link outcome="/page" value="#{name}">
<o:param name="name" value="#{name}" converter="somePrettyURLConverter" />
</h:link>
See also the showcase.