Eircom 'holds up broadband access' - Leaked Government memo

DonegalMan

http://www.timesonline.co.uk/article/0,,2091-859696,00.html

The Sunday Times - Ireland, October 19, 2003

Eircom 'holds up broadband access'
Stephen O'Brien

EIRCOM is holding up the roll-out of Ireland’s broadband network, according to a leaked government memo.
The document, prepared for Dermot Ahern, the communications minister, claims that Eircom is charging customers too much. It says that the price of broadband internet access, currently €47.50 a month, needs to fall below the €30 mark.

Ahern plans to issue a directive to the independent telecommunications regulator, Etain Doyle, to review Eircom’s charges. He will also raise the matter at cabinet. An official review of Eircom’s pricing is due next year, but Ahern wants that brought forward.

The document, prepared by an adviser to the minister, questioned Eircom’s commitment to investing in infrastructure in Ireland. “Eircom has held up broadband roll-out in Ireland for years because of high pricing. Any continuation of this is intolerable,” it said.

Prices had to fall below €30 a month, it stated, but “there is little sign of Eircom moving on this. Eircom has little credibility with government on this issue . . . government now sees Eircom as the primary impediment to broadband growth in Ireland.” The memo urges tougher tactics to improve the access of Eircom’s landline phone competitors to hundreds of thousands of Eircom-owned local phone lines.

David McRedmond, the Eircom commercial director, disputed the charge of obstruction. He said the company had heavily reduced its wholesale price for broadband to its rivals, and had kept price increases to phone users 2% below the rate of inflation. Eircom is currently limited to price increases equal to the rate of inflation.

He said: “There is no need for a retail price cap because our prices have been at 2% below inflation. We have halved the price of broadband this year, and now have reduced it further by 20%. We believe it is the job of government to make sure there is an environment for investment.”

The threat of intervention will not be welcomed by Eircom stakeholders Tony O’Reilly and George Soros, who are rumoured to be considering a public flotation.

Eircom was born in 1999 when Telecom Eireann, the state-owned utility, went public for €8.6 billion. It was sold back into private hands for €6 billion after the share price collapsed. Eircom’s fixed-line business was eventually sold to the Valentia consortium in December 2000 for €3 billion.

Uncertainty over Eircom’s future regulatory environment could weaken the flotation.

Broadband penetration rates in Ireland lag far behind most of the EU and Ahern blames Eircom. He said: “Governments and ministers must focus on citizens and the broader economic picture. To that end, intervention is justified.”

Nice to see that the things IOFFL have been saying have been taken on board
Martin Harran

BigEejit

woohoo ... well done to the leaker .... maybe this might give Ahern and Doyle a kick in the arse and get them moving

DonegalMan

Originally posted by DonegalMan
David McRedmond, the Eircom commercial director ... said: “There is no need for a retail price cap because our prices have been at 2% below inflation. We have halved the price of broadband this year, and now have reduced it further by 20%. .”

To paraphrase Mark Twain..."There are lies, damned lies and Eircom spokespersons"


Martin

DonegalMan

I'm like a bus, none to be seen for ages and then 3 in a row
Anyway, I was just thinking...would it be worthwhile IOFFL contacting this reporter and asking him to have a look at problems people are having with line tests and the suspicion that Eircom are not exactly co-operating with UTV and Esat? Could be a nice follow up piece for him.

Martin

Dangger

The Sunday Tribune are actively investigating that very thing Martin. I had discussions with them on Friday, but it was a little late in the day to get it tidied up for this Sunday's edition.

DonegalMan

Originally posted by Dangger
The Sunday Tribune are actively investigating that very thing

Nice one Dave, hope they really can dig up some dirt on this one, the least that Eircom can be found guilty of in this whole line testing fiasco is sheer incompetence.
Martin

Moriarty

*sigh*. The general crap has been split and sent to the recycle bin. Work with me here people, work with me!

Dangger

What the writer is particularly interested in is the line some people have been getting with regard to being told that their exchange is at full capacity.

I actually need to make contact with as many people as possible that this has happened to. I'll start a new thread about it. That is not to say he has no interest in the line failure rates, he has, but since Eircom are telling us all that they have over one million lines enabled yet have hit capacity problems in certain exchanges (with under 10,000 adsl subscribers so far) the porkies have gotta be exposed!

spongebob

The infamous No Slots issue. IOL and UTV (who are bigger than Netsource) seem to suffer this disproportionately....well worth setting up a load of Guinea pig applicants I think.

The Sunday Times will have no problem proving obstruction and will then be told by Comreg that Comreg can do nothing about it.

What kinda car did Doyle get in the end and who pays for the other two's cars by the way, them or the taxpayer. ?

M

DonegalMan

Originally posted by Moriarty
*sigh*. The general crap has been split and sent to the recycle bin. Work with me here people, work with me!

You're quite right, apologies - Martin

shinzon

nice piece i have to say, finally exposing eircom as the liars they truly are is music to me ears

Investing and infrastructure must have the eircom bigwigs scratching there heads.

heres one for you though, for the laugh i tried to order BB on the online store there yesterday and rather then tell me that my lines failed it said that BB is no longer available in my exchange

So I dunno

Shin

Paddy20

I have been waiting for a real newspaper of the calibre of The Sunday Times to produce this type of story, and it is well overdue.

No doubt the Sunday Tribune will as Dangger states, follow up with an even more hard hitting article.

Without IrelandOFFline, it is unlikely that this would be happening now in the forthright manner in which it is. The journalists have finally decided to bite the bullet.

Lets hope that it will have the desired result for us all, and very quickly.

P.:ninja:

seamus

Originally posted by Muck
The infamous No Slots issue. IOL and UTV (who are bigger than Netsource) seem to suffer this disproportionately....well worth setting up a load of Guinea pig applicants I think.

It's a weird one alright. It wouldn't surprise me if (as suggested in another thread) eircom were surruptitiously (sp?) reserving ports on the DSLAM for eircom.net and taking customers from the OLOs who are told that the DSLAM is full. That's pure speculation btw folks

Surely, there are upgrade triggers when a certain capacity is reached in the DSLAM, like the 80% capacity for dial-up POPs? And if not, surely there SHOULD be?

Xian

Originally posted in a leaked government memo
Ahern plans to issue a directive to the independent telecommunications regulator, Etain Doyle, to review Eircom’s charges.

Originally reported in an international study this week
Many of the factors for the slow take-up of broadband still exist such as lack of platform competition and a regulatory environment that will not encourage it to emerge, says the report, which criticises the Commission for Communications Regulations (ComReg) focus on encouraging wholesale access on favourable terms rather than infrastructure competition.

Left hand, meet right hand. Right hand, meet left hand.

dahamsta

It's the folks that don't know any better I'd be worried about. A lot of people here know full well when Eircom is chancing their arm, but the majority of Irish people won't have a clue. And the fact that Eircom is allowed get away with something as simple as saying that they're cheaper for calls - which is a flat-out lie - isn't very encouraging when it comes to something much more complex, like this.

I have to say I don't understand what's supposed to come of this though. Dermie's gonna tell Etain to sort it out and Etain's gonna go into flip mode for a week and a half? Why doesn't he just tell her to feck off? She's well past due by now anyway. Feck off Etain, ya useless lump.

adam

DonegalMan

Originally posted by dahamsta
I have to say I don't understand what's supposed to come of this though. Dermie's gonna tell Etain to sort it out and ....

Very few politicians in this country impress me, but Dermot Ahern has to date on the way in which he has tackled the whole Internet situation - he did deliver on FRIACO.

Problem is that politicians, with best will in the world, can't solve these things overnight, they take time. Unfortuntely, time is the one thing we don't have, we are so far behind the rest of the world already, I shudder to think where we'll be in another 6 or 12 months

Martin Harran

captainpat

Dermot Ahern (our current hero), is a politician. He gets to control Departments etc. So, he currently has Communications matters in his portfolio.

Etain Doyle, as head of Comreg, is now more powerful than she was when she headed uo ODTCR. Right? You have noticed? Anyway, She, He or It (no gender stuff here) has been as useless in combating eircom's venal operations over the past year, and heading on for another year, as ODTR and Comreg have always been. If eircom had been given the job, they probabably would have made it look as if more was being done. Comreg is a Civil Service operation.

So, live with the situation. Don't expect Comreg to change an injustice, or to rock any boats on your behalf. The Civil Service, and all of its officers, are there to keep things running AS IS, until ordered to change it.

It is the good Dermot who must be targeted for any and all change. Etain's job will be to make a change happen, and to minimise any impact on the status quo, so you cannot really complain. There is no political kudos in fixing a wrong, but there is in doing a new right thing. Dermot will take "right things" on board, and Etain will do her stuff, but the "Complaints Department" will be left until after the next General Election to find a champion.

So be thankful that Minister Ahern is so sympathetic to Irelands communications needs, and is doing so much to forward the position. I consider him thge only bright spark in an otherwise gloomy cabinet, if not the entire FF political party.

If this has developed into the wrong thread, It's because I do so now and again.

ednwireland

etain doyle to be replaced shock
not before time i say - sunday business post comreg has refused to comment on speculation that its chairwomanetain doyle plans to step down shortly.
probably going to take a job on the board of eircom i guess

dahamsta

Again Martin, you're missing the point completely. I'm not knocking Dermot Ahern and I agree with the poster below you; i agree that he's the only competent person in the cabinet and quite possibly the entire party. The point I was making was that with Doyle still at the helm of Comreg, implementation of his directives are going to be woeful. All the woman understands is patching, every deal she's delivered so far has been a quilt of weak compromise, bluster and bull****. FRIACO is weak, bitstream is weak, and anyone who thinks the lack of a data USO right now isn't a result of that is a moron.

Ahern did deliver on FRIACO, but via Doyle. Weak implementation, flawed products, broken promises. Are you seeing my point now or do I have to spell it out? Again?

adam

Dangger

Ohh Adam, please spell it out again :rolleyes:

Moving on, Doyle is out, as mentioned above. Can we take this likely accidentally on purpose leak as a salvo to the remaining commissioners, Isolde Goggin, and John Doherty to get the finger out or be subsumed into the department. 120 staff and all those millions and a mess should be a good enough reason in my mind.

dahamsta

Originally posted by Dangger
Ohh Adam, please spell it out again

Dave, you're being a right smartarse the last week or so, is there a problem? Would you like to spell that out, instead of sniping on my every comment like a child?

EDIT: How could I have been so stupid, it's because I didn't give IrelandOffline number one spot in my little awards ceremony last week, isn't it? That's when it started after all, although you didn't explain your snide little comment at the time. And there was me thinking I wasn't important. Well, I have a few gold stars here for my youngfella's forehead, so I'll send you a couple in the post, ok? Well done, you're teh winnar.

adam

nahdoic

Back on topic - this is fantastic news. But just not to let any eircom porkies through

We have halved the price of broadband this year,

You released a sub-standard version of broadband at half the price.

and now have reduced it further by 20%.

You're currently running a temporary promotion on the cost of broadband for the month of October only, still with a sub-standard version of broadband and a minimum 12 month contract.

seamus

Originally posted by nahdoic
and now have reduced it further by 20%.

You're currently running a temporary promotion on the cost of broadband for the month of October only, still with a sub-standard version of broadband and a minimum 12 month contract.

That's exactly what I was thinking.
Eircom's problem is that they know they're the dominant player in the market, many Irish people don't know of anyone but eircom, and so eircom don't have to justify their prices against their competitors. Saying they've halved their prices, or that it's 20% cheaper during a promotion, sounds all well and good, but when the two biggest competitors beat them on price all across the board, it kind of takes any kind of credibility or pity out of their "What more do you want from us?" cries. :rolleyes: Doubly so when you consider that eircom are supplying their competitors with the means to undercut them.

/me taps foot and folds arms.

Adam.....Dave.

nahdoic

Also when you consider the fact that they've 'halved' the price and reduced it by 20% - it sounds very impressive. But when the prices are still too high, just think about how fooping high the prices were in the first case? And how much they were ripping you off by then and still are now.

oscarBravo

It's at times like this that we really need a Ryanair-like competitor to take out full-page ads in the dailies exposing Eircom's bull to the unwashed masses.

C'mon UTV, what about it?

dahamsta

That would seem to be the only approach available OscarBravo. Comreg isn't going to do anything about Eircom's lies and nobody else - the consumers association for example - seems willing to take it on, so I guess it has to be someone like UTV. So what about it UTV? Pwease?

adam

SkepticOne

Originally posted by dahamsta
All the woman understands is patching, every deal she's delivered so far has been a quilt of weak compromise, bluster and bull****. FRIACO is weak, bitstream is weak, and anyone who thinks the lack of a data USO right now isn't a result of that is a moron.

Ahern did deliver on FRIACO, but via Doyle. Weak implementation, flawed products, broken promises. Are you seeing my point now or do I have to spell it out? Again?

The problem is that we are over dependent on regulation generally. While we can speculate about whether ComReg would be better under a different chairpersion, it is this over-dependence that is to blame.

dahamsta

I dunno SkepticOne. Would we really be better off without regulation? Would competition really drive innovation, and drive prices down? There's no question that UTV has driven competition in the republic, but would they have bothered if Eircom was free from regulation?

Again, this is a genuine question, I'd love to hear UTV's take on this. As a company, they're naturally driven towards pushing for less regulation, but would they /actually/ be operating in the Republic now if there was less. Interesting...

adam

DMC

I just can't see a TV ad for UTV on TV3, tbh!:D

SkepticOne

Originally posted by dahamsta
I dunno SkepticOne. Would we really be better off without regulation? Would competition really drive innovation, and drive prices down? There's no question that UTV has driven competition in the republic, but would they have bothered if Eircom was free from regulation?

I did not say we should do away with regulation, just lower our dependence on it.

Would competition drive innovation? I think so. It is the thing that has been missing all this time. We certainly can't expect regulation (regardless of who is in charge) to drive innovation. That is not the purpose of regulation.

UTV because of their dependence on Eircom and regulation can only bring out products based on wholesale product by Eircom. Fore example, their quicksilver product depends entirely on the RADSL wholesale product from Eircom. As such, in this instance, they are not driving innovation.

While ComReg should probable order Eircom to lower their wholesale price, Eircom can in turn get an injunction out against ComReg and take them to court driving out resellers like UTV.

dahamsta

The problem I see is that nearly every operator and ISP in Ireland is dependant on Eircom and regulation to get by and get on; the only exception being EsatBT, who (in my view) have acted in concert with Eircom to hamper competition (albeit implictly). With that level of dependence, I'm not sure that <strike>weakening<strike> lessening regulation is a solution. I'm much more inclined to think that the solution isn't less or even more regulation, but better developed and applied regulation.

In other news, the Sunday Business Post seems to have asked the Commission what Doyle was going to do. They declined to comment, surprise surprise:

The Sunday Business Post reports that the Commission for Communications Regulation (ComReg) declined to comment on whether Chairperson Etain Doyle will step down from the top job in the regulatory agency. Doyle, previously the head of the Office of the Director of Telecommunications Regulation (ODTR), became the chairperson of the three-person team that leads ComReg last year, with her tenure in that job due to last only one year. It has been speculated that either of the two other commissioners, Isolde Goggin or John Doherty, may replace her.

http://www.enn.ie/frontpage/news-9378907.html

adam

spongebob

Adam,

She probably will be replaced as chair of the Commission at the beginning of November but does that mean (sez he hopefully) that she will also be replaced as a commissioner ?

I would personally like /me to be a commissioner and will apply for the job as soon as she vacates it. I hear her wheels are sound enough although I also heard that the wheels were a GIRLY colour so I may take umbrage at this chromatic slight and demand that they re-issue the wheelsto /me ....I would say that a Black X5 with Darkened Windows is what I have in mind as a statement of intent for my Commissionership-itude.

The job is easy for a talented person such as I , I just need a set of wheels with a good sound system to unwreck my head at the end of the day . Once I have performed my amazing Rentokil remedies I need to frighten Festy drivers off the road by coming up behind them with 500w of Sub Bass a rumbling outta me boot.

King Tubby and Augustus Pablo are most effective as a lane clearing measure at that wattage. Meanwhile the other commissioners simply sit it out in traffic waiting for the light to go green, its a karma thing lads innit .

M

dahamsta

I'll be applying too, although I'll be looking for a Fireblade, for that "with it" touch. I was going to go for a Ducati, but I thought that the maintenance costs might be a bit high for the operators liking. Still though, we can get the Fireblade ported and polished and give a little demonstration of speed to the Nifty-Fifty advocating middle-managers.

adam

SkepticOne

Originally posted by dahamsta
The problem I see is that nearly every operator and ISP in Ireland is dependant on Eircom and regulation to get by and get on; the only exception being EsatBT, who (in my view) have acted in concert with Eircom to hamper competition (albeit implictly). With that level of dependence, I'm not sure that <strike>weakening<strike> lessening regulation is a solution. I'm much more inclined to think that the solution isn't less or even more regulation, but better developed and applied regulation.

Again, you seem to have misunderstood what I said. I did not say we should weaken or lessen regulation.

What I said was that we should lessen our dependence on regulation. I hope you can see the difference. If you can't I am happy to explain.

nahdoic

Muck For Commissioner

nahdoic

oh damn. conflict of interest. adam for commissioner too.

dahamsta

Originally posted by SkepticOne
What I said was that we should lessen our dependence on regulation. I hope you can see the difference. If you can't I am happy to explain.

I don't see how we can lessen our dependence SkepticOne, but perhaps I'm missing the point entirely. I'd appreciate it if you'd explain.

adam

spongebob

I am now trending towards an electric blue with darkened windows ensemble since I saw this natty photo of a modded X5 Here , mmmmmmmmm yeah I can see my first 'decision notice' being written right now in the Comreg Chequebook .

Has she gone yet does anyone know or are they simply haggling about wheels and pensions at this stage ?

M

SkepticOne

Originally posted by dahamsta
I don't see how we can lessen our dependence SkepticOne, but perhaps I'm missing the point entirely. I'd appreciate it if you'd explain.

OK.

What passes for "competition" in the internet access market in Ireland is almost totally dependent on wholesale products from Eircom.

These wholesale products are dependent on regulation for their existance. ComReg will halt any Eircom retail product unless there is a corresponding wholesale product.

While this situation persists, the only innovation a company like UTV can do is provide extra mail boxes, web space or bundle their service with voice products in a variety of different ways.

However the fundamental aspects of the service (connection speed, contention ratio, etc.) they can't change by themselves.

Therefore, UTV while they are dependent on Eircom (and by extension regulation) cannot innovate in any significant way.

Consider, in contrast, NTL. While they are subject to regulation, they are not dependent on them. Therefore, it is simply a management decision to reduce prices or increase speeds (within technical constraints).

I'm just using NTL as an example here. My point is that it is the lack of companies that do not totally depend on regulation that drive innovation. Because we have not had much of this genuine competition, we have had little innovation, high prices and delay.

The problem is that cable companies are only in a few areas and the wireless companies are just starting off, but this is where the future lies.

dahamsta

Thanks for that SkepticOne. I hadn't really thought about competing platforms to be honest, mostly because at the moment they're not really competing. Cable certainly doesn't show up on my long distance radio, and although RF does seem to be going places, I'm not entirely sure where, when or how. We definitely need to see a consistent plan on wireless by the Government anyway, and I'm not seeing anything at all on this subject. (Perhaps IO is, I don't know.) And of course satellite is another competitor of sorts, although I think pricing will always be an issue.

All of which leaves me pretty much in the same place I was I'm afraid. The only viable platform at the moment is DSL, mostly via bitstream. I don't think regulation is holding RF back, and I'd be surprised if it was a factor in cable...

adam

SkepticOne

Originally posted by dahamsta
Thanks for that SkepticOne. I hadn't really thought about competing platforms to be honest, mostly because at the moment they're not really competing. Cable certainly doesn't show up on my long distance radio, and although RF does seem to be going places, I'm not entirely sure where, when or how.

I only used cable as an example. My point was that it was not dependent on regulation for its existance. The regulator could disappear tomorow and cable would continue to operate. Same with wireless. This is my point.

All of which leaves me pretty much in the same place I was I'm afraid. The only viable platform at the moment is DSL, mostly via bitstream.

But this forces you into the role of an Eircom pimp since they control all the DSL infrastructure. Without competing infrastructure we are condemned to rely on a regulator to do a job they are not suited for.

I don't think regulation is holding RF back, and I'd be surprised if it was a factor in cable...

Precicely why pushes need to be made in this direction (particularly wireless). Don't push against a brick wall unless you have to.

Da Man

Isn't Eircom the only company to really invest in broadband? If all the other players started building competing infrastructure (cable, wireless, whatever) then Eircom wouldn't be an issue any more. If broadband is so expensive here, surely a competitor should be able to make decent money on their investment? There may well be economy of scale reasons why telecoms products are relatively expensive here.

NTL seem to have their heads up their arses so I don't expect much from them, but these new wireless initiatives (Ripwave?) might spell the end of Eircom's reign. Actually, I wouldn't be surprised if NTL is now accelerating broadband deployment because Eircom has proven that there is a market and is creating broadband awareness in Ireland.

dahamsta

I only used cable as an example. My point was that it was not dependent on regulation for its existance. The regulator could disappear tomorow and cable would continue to operate. Same with wireless. This is my point.

I thought the cable operators had contracts with Comreg like everyone else. If you mean cable Internet contracts, fair enough, but so what: there isn't any cable Internet to speak of. In this case, dependence on regulation - or the lack of it - has achieved nothing. Wireless proves nothing because nothing has been proven.

But this forces you into the role of an Eircom pimp since they control all the DSL infrastructure. Without competing infrastructure we are condemned to rely on a regulator to do a job they are not suited for.

But isn't this all acadamic? We don't have a competing infrastructure.

Precicely why pushes need to be made in this direction (particularly wireless). Don't push against a brick wall unless you have to.

But pushes have been made, a lot of the spectrum has been deregulated, and we're not seeing consistent results. In fact many wireless operators are shying away from the deregulated bands for fear of the noise they'll have to contend with...

I understand your point SkepicOne, but I don't understand the point. In my view we have to concentrate on what we've got, and all we've got right now is Eircom's infrastructure. Sure, we have to look ahead, but we also have to be pragmatic about what we've got now.

adam

SkepticOne

Originally posted by dahamsta
I thought the cable operators had contracts with Comreg like everyone else. If you mean cable Internet contracts, fair enough, but so what: there isn't any cable Internet to speak of. In this case, dependence on regulation - or the lack of it - has achieved nothing. Wireless proves nothing because nothing has been proven.

No. What I was trying to say was that cable operators do not depend on regulation in order to compete in the market.

Other companies like UTV, Netsorce totally depend on wholesale services mandated by ComReg. As such they can't innovate in any real way as I've already pointed out.

But isn't this all acadamic? We don't have a competing infrastructure.

Precicely why this is the area that needs to be pushed. I am repeating myself but sometimes that is necessary.

But pushes have been made, a lot of the spectrum has been deregulated, and we're not seeing consistent results. In fact many wireless operators are shying away from the deregulated bands for fear of the noise they'll have to contend with...

The argument you seem to be making is that because a certain push doesn't appear to be producing results that pushing in this direction is flawed.

I could give you loads of examples where regulatory intervention has not led to desired results. By your logic you would have to conclude that regulatory intervention is pointless.

I understand your point SkepicOne, but I don't understand the point.

I can only explain the point I am making. If you are having difficulty understanding 'the point' whatever that is then you will first have to state what you think 'the point' is. Then mayby I or someone else can help you.

In my view we have to concentrate on what we've got, and all we've got right now is Eircom's infrastructure. Sure, we have to look ahead, but we also have to be pragmatic about what we've got now.

This would be Eircom's view too. Eircom are the only people that should be doing broadband. There is no need for competition. There is already enough competition etc. etc.

I'm not arguing against pragmatism. We should simply recognise that the problems we have won't all be solved by regulatory change. The fundamental problem is not regulatory. Once that is realised then progress can be made.

Ripwave

Originally posted by dahamsta
I don't think regulation is holding RF back,

Spectrum regulation is a significant factor - we might see exactly how big a factor when the 3.5Ghz license are announced.

Ripwave

Originally posted by Da Man
If broadband is so expensive here, surely a competitor should be able to make decent money on their investment?

There is absolutely nothing to stop eircom charging the same as other european telcos tomorrow. So if you invest say €20 million over the next 12 months, and just as you're beginning to start generate cashflow, eircom decide to change their pricing model, you're screwed. You can't base a business plan on what eircom are changing today, unless you're a minnow that won't really challenge eircom. If you're big enough to challenge eircom, then you have to base your business plan on the absolute minimum that eircom might charge. (Which is one of the reasons that NTR/IBB's baseline price of €30 a month is so interesting).

There may well be economy of scale reasons why telecoms products are relatively expensive here.

Our relatively low population density is a significant factor - you know how much it costs to deliver USO to one off housing all over the countryside?