[article in Irish Times] Broadband may require easier unbundling

damien

http://www.ireland.com/newspaper/finance/2005/0513/3837313156BWBROAD.html

The roll-out of broadband finally seems to be making some headway in the Republic with more than 150,000 homes and businesses now using the service.

Eircom remains by far the dominant provider of the service and is continuing to upgrade its telecoms exchanges across the State for digital subscriber line (DSL) technology. But for alternative telecoms providers such as Smart Telecom, Colt Telecom and BT Ireland, significant blockages remain in how they can offer broadband to customers.

Up until now, just a few thousand Eircom lines have been opened to competition through a process known as local loop unbundling, whereby rivals place their equipment in Eircom's telephone exchanges to offer a broad range of products.

Smart Telecom, which has signed up 25,000 users for its broadband product, has encountered frustrating delays in connecting those customers through local loop unbundling.

"Because of restrictions imposed by Eircom, customers have to take a new phone number when they move to Smart broadband," says Iarla Flynn, regulatory affairs director at Smart Telecom. "Eircom have refused to work with us on sorting this problem out. It looks like Eircom are simply trying to block customers from getting the new offer from Smart. It's blatantly anti-competitive."

Smart Telecom is expected to raise the issue at the National Broadband Conference later today in Galway, which will also hear speakers from Eircom, BT and the Commission for Communications Regulation (ComReg).

Unsurprisingly, Eircom denies that it is acting in an anti-competitive manner, and the process of transferring customers through "unbundling" is now the subject of a legal dispute between the regulator and Eircom in the courts.

The conference will also address the future for telecoms and hear international comparisons from experts such as Denis Weller, chief economist at Verizon, one of the biggest US firms. He will discuss how Verizon is beginning a massive infrastructure investment to build fibre directly into people's homes, rather than relying on its copper network. Competition from cable firms, which have already spent $90 billion (€70.5 billion) upgrading networks, forced Verizon to invest further.

"Local loop unbundling and DSL is not the main vehicle for broadband in the US - about two-thirds of the market is owned by the cable firms," says Weller.

Verizon's decision to invest was made only after US regulators confirmed it would not be forced to "unbundle" the new fibre that it lays for other operators to use, says Weller. He adds that the US broadband landscape is very different to the Republic, where there has been little cable competition, but insists that fibre to the home is the industry's future.

Why are Smart not going to court about this or making a complaint to ComReg about this ? I doubt Jamie Smyth can really help them.

cregser

Well, I'm not sure if I get this completely. The article says ComReg are already taking them to court, and that Denis Weller is some sort of witness to a precedent in the US where a company does not have to unbundle its infrastructure. However, Verizon were forced to create their own network whereas Eircom inherited theirs form the state.

Moriarty

Verizon inherited the entire phone network in their area of operations when they were formed after the breakup of AT&T in the early eighties. They are directly compareable to eircom in this country.

Recently Verizon decided to start upgrading their local loop network to fibre optic, but only after it got an assurance from the FCC that they wouldn't have to in turn open up this new network to let any other carrier use it - which they have to do with their copper network, like eircom do here.

Solair

Verizon didn't create their own network!! They also inherited it.

Most of what is now Verizon is what's left over from the split up of the Bell System. While Bell wasn't state owned, it was a government enforced monopoly which was totally comparable to any of the European monopoly telecom's companies of the time.

Any of the "baby bells" are totally comparable with Eircom, BT, France Telecom, Deutche Telekom or whoever...

The Bell System was an enormous monopoly by any standards. It provided all long distance services, the vast majority of local services, supplied and developed ALL of its own equipment (telephones, cables, plugs, switching equipment, satellites, microwave systems you name it... it did it in-house), invented its own protocalls, built and launched satellites!!

Bell was split up into:
AT&T (a long distance carrier)
a pleathera of "Baby bells" verizon is basically a number of these stuck together. These were the local phone companies. Some still retain the Bell name.. e.g. Bellsouth.
Bell Labs / Lucent - Telecommunications Equipment maker.


It took a LOT of legal and legislative pressure to get them to relinquish their local loop monopolies and they behaved pretty much the same as eircom is behaving now.

The US local loop market's been open to signifigant competition for a much longer time than the Irish market, however the same problems that are happening here now happened there when unbundling first came about.

The US has had carrier preselect for long distance calls since the early 1980s, but the local carriers retained a monopoly until much more recently.

---

Interestingly many "Ma Bell" standards became industry norms both in and outside of the USA. For example the "Bell Registered Jack" numbers: RJ11 (standard phone plug) and RJ45 (Standard ethernet and ISDN plug)..

In Ireland in the old days of P&T the big old black or beige dial telephone most people had was actually manufactured to Bell System standards.. and was a "Bell 500".

Also, many of Bell's modem protocalls, their caller ID system, the 5ESS switching system etc etc have lived on.

---

Bell Labs actually invented and developed DSL technology in 1988 but put the technology into cold storage for commercial reasons. i.e. it was making a lot of money out of second lines for modems through the 1990s Also the internet and personal computers hadn't been developed to the extent that people wanted broadband.

Sound at all like eircom marketing ??

bminish

Moriarty wrote:

Recently Verizon decided to start upgrading their local loop network to fibre optic, but only after it got an assurance from the FCC that they wouldn't have to in turn open up this new network to let any other carrier use it - which they have to do with their copper network, like eircom do here.

This assurance that Fibre telco would not be subject to unbundling came as part of the FCC ruling that set some operating parameters for BPL (PLT or power-line broadband). In this Ruling BPL is seen as the 'third Way' to the end user and therefore the market is now fully competitive (never mind that BPL doesn't work!)

One of the issues that most missed about this ruling in all the BPL hype was that the US telcos now have the green light for fibre to the home on their terms.
This now means that if your home is served by fibre only then it appears that they no longer have to unbundle your line or allow access to other operators, In the longer term this is a huge step backwards for the US consumer

Of course Broadband over Gas may yet become the next big thing for the US consumer..

.Brendan

Moriarty

Verizon have a point when they looked for that sort of assurance though. They'll be building out an entirely new infrastructure. There's technicially nothing to stop any other company doing the exact same. One of the main reasons telcos have to open up their networks at the moment is because the current networks were funded by tax payers money in one form or another.. that reason doesn't exist for any newly built fibre local loop networks.

There are of course other reasons, but none that I can think of are as important as who paid for the network to actually be built.

[edit: I'm aware that verizon and the other psuedo baby bells are lobying government to grant them exclusive licences for laying fibre to the home in some states, but that's pretty irrelevant to what we're talking about atm.]

Blaster99

I'm not sure I understand the argument that we "gave away" infrastructure or it was "paid for by tax payers". We sold the infrastructure to private investors and got very good money for it. There's no real difference between tax payers paying for infrastructure and then selling it and a private company building the infrastructure from scratch. If anything, it was quite clever to sell Cablelink and Eircom at practically peak market values.

cregser

^ good point

dahamsta

Blaster99 wrote:

If anything, it was quite clever to sell Cablelink and Eircom at practically peak market values.

Whatever about Cableline and Eircom Retail, at what cost to Ireland's competitiveness in the long term was the "clever" decision to sell Eircom Wholesale?

adam

eircomtribunal

bminish wrote:

One of the issues that most missed about this ruling in all the BPL hype was that the US telcos now have the green light for fibre to the home on their terms.
This now means that if your home is served by fibre only then it appears that they no longer have to unbundle your line or allow access to other operators, In the longer term this is a huge step backwards for the US consumer

The same appears to happen here of course. In the new estates where the developer strikes a deal with one of the emerging triple play operators like Magnet, customers will be locked into the offers of the one company supplying them with telephony, pay-tv and broadband. Those players will be deemed not to have significant market power and therefore not be regulated as an SMP, when of course in the segment of the market they are operating, or for the customers they are supplying, they are the de facto monopolist player.
P.