ComReg proposes cuts in LLU line share price from €9.00 to €0.39c

damien

Analysis please:

The Commission for Communications Regulation (ComReg) today published a consultation on the pricing of Local Loop Unbundling (LLU) line share. If ComReg decides to implement its proposal without amendment, it will mean a drop in the price of line share from €9.00 to €0.39c.

LLU line share is an important product that allows telecoms operators to provide broadband services to customers who currently have telephone lines and want to have broadband also. The line share cost is the amount operators are charged by eircom for the use of the customer’s line for the broadband service.

The use of LLU line share has underpinned the roll-out of broadband in some other EU countries. Chairperson John Doherty said: “The price of line share can be a key element of LLU and broadband roll-out. This price review forms part of an ongoing comprehensive review of the LLU product and processes by ComReg. We believe that the proposed changes can help to re-energise the LLU market. It will also stimulate the further roll-out of Broadband to the benefit of the consumer.”

The full paper consultation paper – ComReg 04/111 – is available on the ComReg website www.comreg.ie. Responses to the consultation are due by the 3rd of December 2004.

damien

Definition of line share:

The Line Sharing Product is used to allow other operators to rent the broadband capacity on a local loop from eircom without taking control of the entire line. It makes it possible for an operator to unbundle the local loop with the objective of providing broadband services only while leaving the provision of voice services to eircom. It is therefore possible for two operators to provide two services (broadband and voice) over the same line simultaneously. This contrasts with full unbundling, where the operator takes control of the entire line, including the voice element.

SkepticOne

Good stuff. About time too. Eircom are more than recovering their cost with the current insane standard line rental which they still recieve with line sharing. However it is worth investigating whether line sharing LLU allows for removal of pair gains and such. I'm not sure it does.

damien

From the main document here I just looooooove this bit:

ComReg is aware that to date the take up of local loop unbundling has been slow. There are many reasons for this, including the general down turn in the telecommunications industry since 2000, the challenge to develop a viable business case given the large number of relatively small exchanges that exist in Ireland and the availability of a Bitstream product which can provide Alternative Operators with an alternative way to supply Broadband. ComReg is also aware that pricing has had an influence on the level of take-up.

ComReg believes that with the tariffs fully rebalanced on the retail side and with the cut in the price of full unbundling to €14.65 the margins on this product, and therefore its commercial viability, have improved significantly. On the other hand, a broadband only offer cannot by definition benefit from the voice revenues associated with full unbundling. ComReg is concerned that the current arrangements for pricing Line Share are hampering the market and should be reviewed.

Jorinn

I suppose any type of price cut is a good thing. What I would really like to see though is a broadband only line that attaches far lower line rental or even none at all for those that just want dsl and aren't bothered about voice calls.

Qwest for example offer the following.....
Standalone DSL (up to 1.5 mbps/ 896 kbps) - No voice phone line needed $33.00
That's a monthly rate of course. that connection normally goes for $28. I would like to see the equivelent here, e.g. a dsl line rental so to speak for about €4 or less per month as opposed to the high full line rental price so only DSL access is provided on the line and no voice calls, though of course VOIP would still be possible

Sorry, that's all a bit off topic.

Mr_Man

is fairly predictable, they will fight it all the way through the courts. Eircom are highly dependent on line rental revenues and anything which threatens them will be fiercely resisted. And as we have seen from Comreg, any threat of legal action and they fold up their tents and run away.

M.

damien

We put together a quick press release about this and so got our comments tagged on to the ComReg story:

http://www.rte.ie/business/2004/1112/comreg.html

http://www.siliconrepublic.com/news/news4a.nv?storyid=single4065

spongebob

In this proposal Eircom keep the line rental in full (unless they charge it out for WLR) or line rental for voice .

The 'other' operator takes the line for data purposes at 0.39c (split in the exchange) ,

As the loop is shared and not fully unbundled eircom make their line rental + 0.39c on it. The sting in the tail is that the other operator could run an 076 or a geographic or ported VoIP number in 'as data' and that Eircom would therefore get no outbound OR inbound voice revenue on the line despite it being an Eircom Voice line ...technically.

Thats my reading of it anyway .

Now about the list of 50 charges that mean you spend €100k or so before you EVEN unbundle a line at all.......reduce them to 10 and reduce each of the 10 by 50% and we could be getting somewhere.

M

eircomtribunal

damien.m wrote:

We put together a quick press release about this and so got our comments tagged on to the ComReg story:

http://www.rte.ie/business/2004/1112/comreg.html

http://www.siliconrepublic.com/news/news4a.nv?storyid=single4065

Hot on the heels of ComReg’s proposal, lobby group IrelandOffline said it was a welcome development, “but is still only one step through the LLU pricing and procedural minefield," said the group’s spokesman Damien Mulley. from the siliconrepublic article.

Very very good and quick reaction.
ComReg mustn't be allowed to steal the show any longer with their Friday afternoon press releases.

How can the DCMNR make sure that any positive decision, like this one, cannot be shot down by Eircom going to the courts?

In the UK Ofcom puts a lot of effort into the implementation of LLU, to make sure the incumbent will not throw a spanner into the works.

One thing about this issue:
"Currently in Ireland out of 1.7m phone lines only 2500 have been unbundled."
These are mainly the lines unbundled by Esat, I would think. While 2500 unbundled lines is bad enough, how big was the gov grant Esat got? Was it something like 15 million? (I don't remember)
My point is: We would not have any unbundled lines, had the unbundling not been paid for dearly by the taxpayer.

P.

damien

eircomtribunal wrote:

We would not have any unbundled lines, had the unbundling not been paid for dearly by the taxpayer.

Yup, I mentioned that too.

Oh yeah, here's another:

http://www.enn.ie/frontpage/news-9564832.html

shinzon

probably a long shot, but if line share LLU becomes a reality, would it mean that say you went with esat and said hey i want broadband, your required to give it to me under llu sharing, would they then be required to repair the line or am i barking up the wrong tree here

Shin

Blaster99

Has ComReg or the government set themselves any targets on LLU, by the way? So when it turns into the total fiasco that it's going to turn into, they will have to take action? I presume they haven't set any targets officially, but it would be good if somebody could nail them on that.

As for the line share deal, I'm sure it could be attractive depending on all the other charges related to getting access to the exchange.

spongebob

shinzon wrote:

probably a long shot, but if line share LLU becomes a reality, would it mean that say you went with esat and said hey i want broadband, your required to give it to me under llu sharing, would they then be required to repair the line or am i barking up the wrong tree here

No. ESAT are entitled to get certain crap cleared off the line under the provisions of the CLFMP . That doc is on the Eircom Wholesale site IIRC

M

viking

Muck wrote:

No. ESAT are entitled to get certain crap cleared off the line under the provisions of the CLFMP . That doc is on the Eircom Wholesale site IIRC

Does that apply to Shared LLU though?

Gareth

De Rebel

As always with ComReg, far too little and far too late.

Shared LLU is a sop to eircom. A means of allowing them money for old rope (line rental +39c) while somebode else provides the service.

I no longer need a voice line. The few remaining calls I make could be made on my mobile and even at higher mobile charges would result in a considerable saving (when line rental saving is taken into account).

What we NEEDED to stimulate real competition was raw DSL, where an OLO could offer DSL and eircom would receive a nominal fee for the provision and maintenance of the copper, with no voice service provided. What we GOT is this monkey, another pointless exercise.

Good on ya ComReg. Yer the best thing that ever happaned to eircom's shareholders.

Capt'n Midnight

eircomtribunal wrote:

One thing about this issue:
"Currently in Ireland out of 1.7m phone lines only 2500 have been unbundled."
These are mainly the lines unbundled by Esat, I would think. While 2500 unbundled lines is bad enough, how big was the gov grant Esat got? Was it something like 15 million? (I don't remember)
My point is: We would not have any unbundled lines, had the unbundling not been paid for dearly by the taxpayer.

:eek: Us taxpayers have paid the telco's €6,000 per line, so they can say there is competitition...

spongebob

De Rebel wrote:

What we NEEDED to stimulate real competition was raw DSL, where an OLO could offer DSL and eircom would receive a nominal fee for the provision and maintenance of the copper, with no voice service provided. What we GOT is this monkey, another pointless exercise.

Thats why I invented SCHLUP, an Irish solution to an Irish problem if ever there was one .

M

eircomtribunal

Capt'n Midnight wrote:

:eek: Us taxpayers have paid the telco's €6,000 per line, so they can say there is competitition...

Well, I'm not sure about the figure of the grant, but it was somewhere in that region.

Just looking up the number of unbundled lines. The March 2004 figures say there are 280 full unbundled lines and 1100 shared unbundled lines.

P.

eircomtribunal

The latest figures on Unbundling in Europe (Irish figures are March 2004, the rest are July 2004)

Half unbundling (shared access lines) played a big role in the recent dsl development in France, the Netherlands and in Sweden. After Ofcom's planned price reduction in the UK similar developments can be expected there.

The very low shared LLU price suggested by Comreg will in itself not have a big impact unless the penal colocation pricing by Eircom is stopped (not reduced or reformed, but defined completely new in analogy to colocation pricing in hosting or tele houses) and a forward looking USO defined and enforced by the regulator.
P.

LFCFan

would this mean the operator who is paying 0.39c for the data part of the line could then provide something like ADSL 2+ if they wanted?

Moriarty

They can provide whatever data services will run over the copper pair. They provide their own equipment at the exchanges.

spongebob

Moriarty wrote:

They provide their own equipment at the exchanges.

Only until SCHLUP is implemented.

M

damien

http://www.comreg.ie/publications/default.asp?ctype=5&nid=101878

All responses to this consultation should arrive on or before 17h30, on 3
December 2004.

Send them to: Sharon.Ward@comreg.ie

Slutmonkey57b

Ok, I'm not sure if this is what you're looking for us to send (or even if I understand the questions properly), but here's what I fired off anyway:

1) Yes, I do agree that the price for line sharing should be based solely on the provision of billing and administration. The current LLU regime does not reflect the true costs to Eircom of the provision, nor does it allow OLO's to offer a truly competitive service based on cost, rather than the profit levels demanded by eircom. Eircom's pricing both for wholesale and retail line rental are well above the European average, and far in excess of the level of network investment they provide.

2) In terms of other charges, it depends on what the planned definition of "other" incremental charges is. The provision of the line split should not penalise the OLO for any "cleanup" of the line by eircom, either in costs of removing pairgains, or otherwise. The cost of split line LLU should be as set out above, with the proviso that eircom is required to provide a line to the OLO that is capable of supporting the services that the OLO plans to offer the consumer - rather than the services that eircom is prepared to allow competitors to provide.

eg: Currently I have CPS with another operator for both voice and "flatrate" (packaged hours) internet. In fact, I have no use for a landline for the provision of voice calls, and the only reason the line is connected in my house is that there is no local broadband provision - cable, wireless or otherwise (wireless/satellite masts cannot be installed, as is the case with many houses and apartments nowadays) and the line itself does not pass the DSL test. I am therefore paying the highest line rental in europe, for a line that barely supports the service I require from it, from a company I do not wish to have any dealings with. Based on my previous experiences with eircom, I would prefer to pay my line rental to my OLO, IN ENTIRETY, and have no money go into eircom's coffers at all. This is simply not viable until the total LLU regime is reformed, the "access costs" determined by eircom for an OLO to visit and unbundle an exchange are reduced to sane levels, and the OLO's can provide genuine competition over clean, accessible lines.

Moriarty

This was the submission we made.

Reference: Submission re ComReg 04/111

"Q. 1.Do you agree that the price for LLU Line Sharing should be based on the incremental costs associated with the service i.e. the costs associated with carrier billing and administration? Please state the reasons for your answers. If you have an alternative proposal please document it clearly in your response."


IrelandOffline welcome the decision to decouple line share pricing from the cost of the local loop. We agree that the price for LLU line sharing should be based solely on carrier billing and administration expenses.


"Q. 2. Are there any other incremental costs that should be considered in calculating the Line Share monthly rental charge? If so, please state your reasoning as well as documenting clearly in your response the other costs that you think should be considered."


IrelandOffline do not believe that any other incremental costs are relevant to calculating the line share monthly rental charge.

However, IrelandOffline would like to draw attention to the very high costs associated with beginning the unbundling process in each exchange and the subsequent colocation of equipment. It is the hope of IrelandOffline that ComReg will review downwards the pricing for these aspects significantly, as well as vastly simplifying the overall process.

It is also the view of IrelandOffline that an unambiguous sub-loop unbundling process should be a high priority for ComReg.


Regards, etc
IrelandOffline

spongebob

Moriarty wrote:

This was the submission we made.
"an unambiguous sub-loop unbundling process should be a high priority for ComReg."

Excellent stuff, lets see how they answer it.

M