Why is LLU not working?

nahdoic

Yesterday's announcement by ComReg, has confirmed yet again what we have known for years. ComReg have neither the power nor determination necessary to develop a competitive environment to allow OLOs compete against the incumbent through the use of LLU.

This is a disgrace, I will be sending letters to

Etain Doyle
Commission for Communications Regulation
Block DEF, Abbey Court
Irish Life Centre
Lower Abbey Street
Dublin 1

Dermot Ahern, T.D.,
Minister for Communications, Marine and Natural Resources,
Hill Cottage,
The Crescent,
Blackrock,Dundalk,
Co. Louth

Pat Rabbittee TD, Labour Party Leader
Tommy Broughan TD, Labour Spokeperson on Communications
Enda Kenny TD, Fine Gael Party Leader
Simon Coveney, Fine Gael Spokerperson on Communications
Mary Harney, Progressive Democrats Party Leader
Caoimhghín Ó Caoláin, Sinn Féin Party Leader

There are 3 areas that I would like to research and cover in the letters. If you could help answer any of these questions, I'd appreciate your help. And heck send on in your own letter as well.

a) What benefit will successful LLU reap?

b) What is the history of LLU in Ireland and why has it failed up to now? (Dates and figures would be good)

c) What are all the critical factors required to ensure LLU is a success?

nahdoic

c) What are all the critical factors required to ensure LLU is a success?

Ovum did an interesting strategy report for Portugal on this.

Critical Success Factors for LLU

- Provision of adequate co-location services where space is limited or not available.
- Fair relationship between the incumbent’s wholesale and retail pricing
- Provision of wholesale products while LLU is taking place
- Low local loop pricing
- Regulator takes a proactive approach
- Incumbent recognizes the benefits of LLU
- Enforcement of Reference Offer by regulator
- SLAs are enforced with meaningful penalties
- ‘Carrot and stick’ approach to the incumbent

spongebob

That Ovum report is good stuff Nahdoic. A tasty morsel you have dredged up .

M

Xian

Originally posted by Muck
That Ovum report is good stuff Nahdoic.

Aye, in particular the conclusion that network competition is the best and near-optimal solution for all stakeholders but the incumbent.

SkepticOne

Originally posted by nahdoic

There are 3 areas that I would like to research and cover in the letters. If you could help answer any of these questions, I'd appreciate your help. And heck send on in your own letter as well.

a) What benefit will successful LLU reap?

LLU may have had some benefit in Ireland if it had been successully introduced with stable prices and service level agreements from the start. It would have enabled OLOs to introduce DSL technology not of the choosing of the encumbent. This may have allowed somewhat higher speeds than those currently offered and the OLO's would have had more control over latencies and contention ratios and such.

b) What is the history of LLU in Ireland and why has it failed up to now? (Dates and figures would be good)

LLU has failed up to now because from day one, the LLU charge determined by the regulator has been in dispute by Eircom. Only a figure that would successfully fend off competition would have been acceptable to Eircom. During the current dispute Eircom were quoted as wanting a LLU line rental price of 27 euros, more than 3 times the eu average. Since Ireland competes with other countries for investment, it was inevitable that there would be little interest in LLU from OLOs. Far better to go to countries where the LLU price was a) not constantly being disputed in the courts and b) low.c) What are all the critical factors required to ensure LLU is a success? [/B][/QUOTE]Only if a low and undisputable price had been successfully imposed upon Eircom from the start, would LLU have worked.

Unfortunately, the factors that have led to its failure are set to continue. The fundamental problem is that Eircom will always have the power to dispute decisions made by the regulator involving it's infrastructure in the high court. A successful and repeatable strategy, therefore, is to launch legal action thereby creating uncertainty among OLOs and drop the case when concessions are made. This means that the LLU price will either be a) high, or b) uncertain. Both situations put off investment by OLOs.

What are all the critical factors required to ensure LLU is a success?

Only if a low and undisputable price had been successfully imposed upon Eircom from the start, would LLU have worked.

To solve the problem, we need to look at the original purpose of LLU. This was to create competition that would otherwise not materialise.

Can those aims be achieved now without LLU and without depending on the cooperation of an incumbent whose interests are diametrically opposed to competition?

To answer this requires looking at how other countries achieved success where Ireland failed. It turns out that LLU has had very little success in bringing about large scale competition in most countries where it has been introduced. I believe we are flogging a dead horse trying to get it to work in Ireland. It was something that showed promise back in 1999.

Ripwave

Originally posted by nahdoic
I will be sending letters to

Etain Doyle
Commission for Communications Regulation

Dermot Ahern, T.D.,
Minister for Communications, Marine and Natural Resources,

Pat Rabbittee TD, Labour Party Leader
Tommy Broughan TD, Labour Spokeperson on Communications
Enda Kenny TD, Fine Gael Party Leader
Simon Coveney, Fine Gael Spokerperson on Communications
Mary Harney, Progressive Democrats Party Leader
Caoimhghín Ó Caoláin, Sinn Féin Party Leader

You might want to drop a line to the Minister in the Department of Social and Family Affairs, as that Department is paying the line rental for a couple of hundred thousand telephone lines. There's probably a couple of telephone exchanges where more than 50% of the lines are being paid for by the Government.

Even this government must be able to use a €2m per month line rental bill to get some leverage with Eircom. Maybe threatening to put out a CPS tender for all the phone calls made by Social Welfare recipients would be enough to make eircom wake up and pay attention.

spongebob

Originally posted by Ripwave
You might want to drop a line to the Minister in the Department of Social and Family Affairs, as that Department is paying the line rental for a couple of hundred thousand telephone lines.
Maybe threatening to put out a CPS tender for all the phone calls made by Social Welfare recipients would be enough to make eircom wake up and pay attention.

Maybe that s why Eircom are so anti LLU and single billing. The government could move 200,000 lines (I think that is the figure) from their revenue net in one fell swoop through tendering 12% of all Eircom lines . Good business or wha!?

M