IrelandOffline article in Business & Finance magazine.

Dangger

I could not find a link for this so here goes…..

Dealing with an Ireland Offline by John Collins

Business and Finance 20-26th September

Irish users give up on the Net due to boredom rather than issues of cost or a lack of options for broadband access. The main barriers to growth of Internet use in this country are availability of content or services relevant to users and a lack of perceived benefits of going online.

That was the rather unique view of the Irish Internet market given by Soula Evans, Director of Consumer and Business Markets at Eircom when she spoke at the Ireland Offline seminar in Dublin recently. Ireland Offline is a loosely organised pressure group, which came together when Esat placed restrictions on its Surf No Limits off-peak flat rate product earlier this year. The group has three demands unmetered access Internet access, local loop unbundling, and the availability of reasonably priced broadband for the home and small business users.

The seminar was held to discuss the issues that are holding back the introduction of these services. Minister for Public Enterprise, Mary O’Rourke outlined the investments made under the National Development Plan (NDP) to bring broadband to the regions. However she prefaced her speech by pointing to the general downturn in the global telecoms market and warned that it is “not like the fifties or sixties, we don’t have high protectionist walls around us”. The downturn has meant that many firms didn’t take up funding for projects that was available under the NDP. As a result future awards will be made on a rolling basis with funds passing to the next company in line if they are not taken up. O’Rourke also blamed the downturn for the lack of companies applying for local loop unbundling (LLU). She believes that everything is in place for broadband DSL to be offered using LLU. But this is strongly contested by operators who have been negotiating with Eircom to offer such services.

Martin Harran, chairman of Ireland Offline pointed out that the theory of being able to offer broadband unmetered access is very different to the practice. While LLU can theoretically take place, not one loop has been physically unbundled. DSL has been tested by Eircom as early as 1999 but is still not a reality. Harran said what is killing Internet access in Ireland is the amount of time it takes to do anything and he pointed to the protracted testing and discussions of ADSL as an example of this. Cheap broadband access is key to the development of the economy according to Harran as future growth will be in the information sector and the Internet is key to capitalising on this opportunity.

Harran pointed out that the members of Ireland Offline who run their own business are suffering a competitive disadvantage under the current Internet pricing structure. A firm in the UK can have a flat rate broadband access from ª40. In contrast a small Irish firm is faced with using a 56k dial up modem and can easily rack up phone bills of 400 a month. He pointed to both OECD figures and the usage pattern of Esat Surf No Limits subscribers to demonstrate that once unmetered access in introduced in a market usage accelerates rapidly. Finishing to loud applause Harran called on the powers that be to “quit bickering and quit blaming everyone else. Let’s get off our asses and get on with the job that needs to be done”.

Director of Telecommunications Regulation Etain Doyle outlined the role of her office in regulating Internet access products. The ODTR provides a framework for companies to offer services, but is up to the companies themselves to provide those services. Already this year the ODTR has introduced two Internet new access telephone codes‘ 1892 (for pay as you go services) and 1893 (full or partial flat rate). Negotiations are still ongoing between Eircom and other licensed operators (OLO) as to ho these numbers will be operated and charged. Regarding flat rate products, dial-up or broadband, Doyle said that the current regulations mean that Eircom cannot refuse a reasonable request from another operator and it must offer a wholesale price to OLO’s on any services it offers to its own subsidiaries or consumers.

Derek Kickham, managing director of Esat Fusion pointed to the companies track record of introducing innovative products. The oceanfree.net service was the first subscription free package in Ireland and in the three months after it was introduced 60,000 new homes went online. It introduced the Surf No Limits product as it felt there was a market for flat rate access and understood it would make a loss initially. However the market and regulatory environment has not change and flat rate is not sustainable on an economic basis. In fact Kickham said ‘the future looks grim’ for the company’s 18,000 Surf No Limits customers as there is no economic model to provide the service.

Clearly referring to Eircom’s infrastructure Kickham said the only economic way to provide Internet access to Ireland’s geographically disperse small businesses is to use the existing infrastructure at a price that suits anyone. Kickham is very keen for the introduction of a FRIACO (flat rate Internet access call origination) product which would give operators access to Eircom’s network for a fixed price per year. In April Esat submitted a list of requirements to Eircom that are required to introduce FRIACO but there has been no movement since.

Soula Evans of Eircom said she was still confident that ADSL would be launched September 28. Given the fact that Eircom and the ODTR were still in dispute over the pricing of the service and Eircom was suing the ODTR over the indicative pricing it released last April, others at the seminar were less confident that it would be launched on schedule.

Both Evans and Pat Galvin from Eircom’s regulatory affairs department stressed that Eircom could only introduce products that are commercially sustainable. Galvin suggested that there is an assumption that FRIACO will provide cheap Internet access but in reality it only provides certainty of cost for the user. He also said that if Eircom is forced to invest heavily in its standard PSTN network this would jeopardise its investments in the next level of IP access such as DSL.

This was countered by his opposite number at Esat, David Taylor whop pointed to the fact that an efficient operator close to Ireland (clearly referring to Esat’s parent company BT) can introduce FRIACO and other companies can make a profit from providing the service. There was another Eircom’Esat spat when Kickham called for more powers to be given to the ODTR. He said that the current censures of ª1500 daily fines and a withdrawal of an operator’s licence are not suitable as ‘one is draconian and the other is ludicrous’. Galvin replied by saying the country doesn’t need more punishment of Eircom as it has been responsible for the fastest deregulation of the telecoms industry of any country in Europe.

The sometimes comical nature of the claims made at the seminar was underlined when a couple of the delegates ran into Billy Connolly who was staying in the hotel where it was being held. Spotting the opportunity for a wind up they told Connolly what the meeting was about and asked him would he address the gathering. Connolly’s response was amusing but telling “You must be joking,” he said. “Sure aren’t you the e-hub of Europe.” Clearly those with the powers to make us an e-hub just don’t get the joke.

SkepticOne

Excellent article. It nicely summarises the meeting and the Internet situation in Ireland. IrelandOffline comes accross very well too.

R. Daneel Olivaw

Both Evans and Pat Galvin from Eircom’s regulatory affairs department stressed that Eircom could only introduce products that are commercially sustainable. Galvin suggested that there is an assumption that FRIACO will provide cheap Internet access but in reality it only provides certainty of cost for the user. He also said that if Eircom is forced to invest heavily in its standard PSTN network this would jeopardise its investments in the next level of IP access such as DSL.

Interesting attitude, considering they were able to deal with 12p per call, for unlimited lengths of time, back in the 80s. I verified this today.

So exactly what "investment" (again that word from Eircom) would be needed to resupply a service from 20 years ago? Is that too much to ask? That is pure scapegoating on Eircom's behalf. They had the ability to have national flat rate 20 years ago.

12p per call.
10 calls is £1.20.
30 days in a month, = £3.60 for 1 call per day, connect online as long as you want, flat rate for under a fiver, in the middle of 1980s, for a whole month. How about that.....£3.60/month FRIACO. Sorry, that was in the 1980s, this is hi-tech 2001.......that will get you 5 hours online sonny. Now **** off and buy some shares.

So exactly what investment is needed? There is massive bandwidth redundancy in Ireland? Are Eircom secretly renting it out to some company/ies? The international carrier rates are negligible and are not anywhere near the prices they want for ADSL.

The Eircom response would obviously be that more people would be wanting to use the networks these days, so the cost is not viable like it was in the 1980s......which is EXACTLY the opposite of their reasoning that there is no demand.

QED.

sceptre

Originally posted by Dangger
Galvin suggested that there is an assumption that FRIACO will provide cheap Internet access but in reality it only provides certainty of cost for the user

That's flat-rate Pat. One of IrelandOffline's three objectives. Competition may or may not drive prices down for the consumer. I'd like to find out.

(btw nice one Dangger - not a B&F reader (except when I come across it in receptions) - thanks for posting the article)

Fergus2

So exactly what investment is needed? There is massive bandwidth redundancy in Ireland? Are Eircom secretly renting it out to some company/ies? The international carrier rates are negligible and are not anywhere near the prices they want for ADSL.

This capacity argument is rubbish.. if eircom can't cope, thats their problem. the technology has been around for years. i'm not going to pay for their ignorance/inefficiency.