LLU - How does it work?

rahtkennades

Hi all,

I'm just a bit confused about something. I was thinking about how local loop unbundling works in practice, and I have a question.

If an exchange is unbundled, this allows different carriers to bring backhaul into the exchange and connect to the equipment that connects to customers' phone lines (the local loop), correct?

But surely the incumbent provider (in this country eircom) still owns the physical lines to the house, given that they're bundled in 50 or 100 pairs.

So does the new telecoms provider still have to pay 'line rental' to the incumbent provider to provide for maintenance of the line?

Not sure if I've missed the point here

jesus_thats_gre

rahtkennades wrote:

So does the new telecoms provider still have to pay 'line rental' to the incumbent provider to provide for maintenance of the line?

Basically, yes..

rahtkennades

jesus_thats_gre wrote:

Basically, yes..

So unless the new provider builds completely new infrastructure from the house through the exchange (in whatever form that takes) and out to the world, then they're always going to be beholden to the big telco.

Man that sucks!

SkepticOne

rahtkennades wrote:

So unless the new provider builds completely new infrastructure from the house through the exchange (in whatever form that takes) and out to the world, then they're always going to be beholden to the big telco.

Man that sucks!

Same in any area of business. If you don't own the infrastructure you have to rent it off the company that does. In theory, the regulator is supposed to ensure a fair price. In theory...

Liam Byrne

SkepticOne wrote:

Same in any area of business. If you don't own the infrastructure you have to rent it off the company that does.

The annoying factor in this case, though, is that "we" DID own the infrastructure (our taxes paid for Telecom Eireann) and the current shower of idiots not only sold it, but had the cheek to get Irish people to "buy" the shares :rolleyes:

As a result of this short-sightedness, everyone gets screwed every month when their bill arrives, even if they've gone with a cheaper/better provider.....Smart get less of my bill than eircom do!

Welcome to the consequences of FF/PD "privatise everything" attitude :mad:

rahtkennades

Liam Byrne, agreed about the case of this country, it would be laughable if it weren't so embarrassing and also serious.

My initial question though I guess was kind of theoretical about how the model of LLU actually works.

Following from SkepticOne's point, if you want to remove the need to pay rental to the owner of the infrastructure, the only way is to break up that owner into small localised chunks on some sort of 'franchise' basis, much in the way British Rail was broken up. Then Company A owns the exchanges and lines in Limerick, Company B in Galway, etc.

But then I guess that has it's own downsides.

So is there an alternative model?

bk

And the LLU operators don't just have to rent the line from Eircom. They also have to rent space in the exchange, electricity, key holder access, etc.

LLU can work really well, just look at France for an example.

You know I was just thinking the regulator could make things fairer by setting a single cost (includes line rental, electricity costs, etc.) per broadband line and then force Eircom to charge itself the same costs for bitstream. It would level the playing field very well and would promote the use of LLU.

Not likely to happen, but I can dream.

watty

The LLU line costs about €17 a month. Which is more than many retail line rentals in Europe.

Add cost of backhaul, the DSLAMs etc and possibly rental of space, you can see why 96% of DSL is NOT LLU.

The idea is that LLU would provide innovative services, high speeds, competition etc.. But at the current cost and also the the procedures to change over and initial charges it's hard to make money at it. Very little money is made out of Bitstream reselling.

So basically all DSL competition is a failure in Ireland.

bealtine

watty wrote:

Very little money is made out of Bitstream reselling.

This is known as margin squeeze...

bk

watty wrote:

The LLU line costs about €17 a month. Which is more than many retail line rentals in Europe.

Add cost of backhaul, the DSLAMs etc and possibly rental of space, you can see why 96% of DSL is NOT LLU.

That is why I'm suggesting that Eircom be forced to charge itself the same amount for each bitstream customer as LLU, plus the extra for backhaul, DSLAMS, etc.

That way it would level the field between bitstream and LLU and make LLU more interesting and competitive for other ISPs.

SkepticOne

bealtine wrote:

This is known as margin squeeze...

When Eircom sells off its retail division ([SIZE=-1]Babcock & Brown retaining the wholesale division) [/SIZE]this squeeze will get much tighter. The regulatory mechanism for maintaining a forced margin will be gone. This will force so-called competitors to actually offer competing services and further the aims of the now-defunct IrelandOffline.

rahtkennades

bk wrote:

That is why I'm suggesting that Eircom be forced to charge itself the same amount for each bitstream customer as LLU, plus the extra for backhaul, DSLAMS, etc.

That way it would level the field between bitstream and LLU and make LLU more interesting and competitive for other ISPs.

Hang on, I would have assumed that eircom wholesale, who are technically a separate entity to eircom retail, would have to charge eircom retail the same rate as any other company. Surely at least that basic level of regulation exists?

watty

That's not the problem.

The problem is that bitstream overall is more attractive than LLU and that even Bitstream makes little money.*

Eircom Retail don't pay for LLU at all, and only pay for Bitstream. Since it is a single company it doesn't much matter to eircom retail what is paid.

ONLY eircom competitors are going to buy LLU.


*Line rental is so high it means that the bitstream price to customer which is on top of line rental is actually low compared to reseller costs.

If Line rental was €5 instead of €26, and LLU €5 instead of €17 then LLU and Bitstream would both be very competitive.

Cabaal

bk wrote:

And the LLU operators don't just have to rent the line from Eircom. They also have to rent space in the exchange, electricity, key holder access, etc.

LLU can work really well, just look at France for an example.

Its also starting to work very well in the UK

Duiske

Will unbundling exchanges have any impact on the number of split lines in the country ? Will the costs involved mean that Eircom's competitors will avoid unbundled exchanges in more sparsely populated areas ?

Sponge Bob

frankly its unlikely that any beyond the 100 biggest exchanges will be unbundled, ever that is .

Duiske

Sponge Bob wrote:

frankly its unlikely that any beyond the 100 biggest exchanges will be unbundled, ever that is .

Same old story. You build your hopes up, then...........:(

Sponge Bob

You probably live on one of the other 1200 or so that will never be unbundled.

If , however , the local sewage scheme were to be done you could take the opportunity to bury some fibre for a metro ethernet core and start rolling out GPON in the town instead of ****ty old copper

croo

it's probably an old one, but if it's going through the sewage system should it not be called PONG instead of GPON?