Digital Cable - Chorus to refund clients

Victor

http://www.ireland.com/newspaper/finance/2002/0126/1081915593BZCHORUS.html

Chorus to refund clients
By Jamie Smyth

Chorus has failed to meet a revised schedule to offer digital television services in two franchise areas and will have to refund 9,000 customers 10 per cent of their current cable TV costs.

The firm has failed to upgrade its cable to offer digital TV in Malahide and Swords and will have to refund customers under a scheme devised by the telecoms regulator.

The refund in these two areas alone will run into thousands of euros. Chorus will have to meet a number of other digital TV roll-out deadlines this year in several different franchise areas.

The refund will apply to the basic TV package in Swords and Malahide which costs £15 (€19.05) per month. Customers will receive a discount of €1.90 for each month that Chorus fails to upgrade its digital cable. This will cost the company almost €18,000 each month.

The 10 per cent discount condition was recently applied by the telecoms regulator, Ms Etain Doyle, following her decision to allow Chorus to increase its prices last October. In her decision notice, she said the price increase was necessary because Chorus "has a pressing need to upgrade network to bring service quality to a standard required by all of its customers and to meet its licence conditions".

More than 100 customers complained to Ms Doyle about the price increase. At least 10 per cent of these were in Malahide where customers complained of poor service quality, according to the regulator's report on the price increase. Customers from other areas also complained about poor service quality.

Ms Doyle approved price increases of up to 29 per cent in Chorus franchise areas. The regulator agreed to the increase because Chorus shareholders had "given the director a commitment to finance and implement the programme".

Chorus was required to complete its upgraded digital network by January 1st, 2002 under a revised plan introduced by Ms Doyle last year. This followed an earlier failure by both Chorus and another cable group NTL to meet their licence requirements to offer digital television services within a specified timeframe. Both firms face significant cash flow difficulties due to a downturn in the sector and the high costs of upgrading networks.

A Chorus spokesman said the company had encountered some problems with its "cable ends" but anticipated these would be overcome within four to six weeks. He said the company would pay any refund due as a lump sum to customers.

Meanwhile, the telecoms regulator confirmed yesterday that NTL was complying with its revised schedule to offer digital TV services.

yankinlk

ouch, thast goona hurt i recon. 18k a month? and that sounds like its only the start when the other areas kick in.

what exactly is missing in these areas? i have/pay for chorus "digital" but as far as i can tell im only getting the same old dodgy service with a few more channels

murcielago

This shows the regulator does have clout under existing legislation if and when she is prepared to use it.
Consumers should not accept lame excuses from the providers or from the regulator.

dahamsta

I don't understand this to be honest - why Swords and Malahide? And how long have Chorus been servicing these areas?

adam

Boston

i would ahve expected those areas to be under ntl, they must not be cable but that arieal thing they do, not wireless, the crapier form of that.

Mountjoy Mugger

Originally posted by dahamsta
I don't understand this to be honest - why Swords and Malahide? And how long have Chorus been servicing these areas?

adam

They have been servicing them since they bought out Irish Cable Management a couple of years ago.

dahamsta

You mean MMDS? (It is wireless btw. Anything without wires is, well, wireless... )

Seems an odd place to do MMDS, and it would still encroach on NTL's licence if those areas were in NTL's cachement area.

adam

dahamsta

Ah, I see. Thanks MM.

adam

emmet

Originally posted by murcielago



This shows the regulator does have clout under existing legislation if and when she is prepared to use it.




Consumers should not accept lame excuses from the providers or from the regulator.

I beg to differ.







What it shows is that the regulator can attach conditions when operators are seeking increases which are under her remit to control and nothing else.







In a scenario where Eircom were saying "please Ms. Director, can we increase the price of ADSL" she could attach conditions to the increase. In the scenario which actually prevails, where Eircom have no interest in launching an ADSL service at all, and (it is likely) want to prevent such a service being launched for as long as possible, the regulator is utterly powerless.







Further, I would speculate that the Director couldn't attach ADSL-related conditions to non-ADSL increases. If she did, I have no doubt that the writs would start flying.







Be in no doubt, ADSL is not in Eircom's interest since they will lose their extortionately priced small leased line business and their daytime dialup business almost entirely. It is likely that they will attempt to prevent ADSL deployment for as long as possible to protect these revenue streams until they are threatened credibly by OLOs. Eircom are thrilled that cable-modems have flopped and ecstatic that the Director "won't allow them" to launch a service that they don't want to exist in the first place. Otherwise, I would expect every trick in the book --- legal challenges, injunctions, lack-of-cooperation with the Director and OLOs to the maximum possible extent.







Whatever idiot left four to six zeros off the end of "1,500" in the existing legislation should be fired unceremoniously. I even wonder whether the ODTR was deliberately de-fanged to protect the Eircom monopoly, it seems like too absurd a cock-up to have been accidental.







Emmet.

Boston

why does everybody say that, they will not losse there kleased lien business to adsl, adsl just isnt made for that type of thing

it just wouldnt be in hte same leauge, llu is more of a threat because sdsl can then be rolled out, which would detroy leased line business in this country,

SkepticOne

Originally posted by Boston
why does everybody say that, they will not losse there kleased lien business to adsl, adsl just isnt made for that type of thing

But leased lines have many functions and a lot of these overlap with the functions of ADSL. I believe that a lot of companies are forced to use leased lines because cheaper alternatives are simply not available. They may then go on to take advantage of the dedicated bandwidth aspect of leased line Internet access but that may not be their primary concern.

it just wouldnt be in hte same leauge, llu is more of a threat because sdsl can then be rolled out, which would detroy leased line business in this country,

I agree that LLU may pose the bigger threat. This is because Eircom are not in complete control of LLU, it being mandated by EU law.

Boston

still id imagine it would be very few companies, i mean you dont shell out what 2-10 grand for the installation of a leased line when adsl would suit your needs.maybe the really low end market like 64k leased lines, but they hardly make up a large percentage of the total lines and against, most comapnies need static ip address, so your talkign about that 200-250 euro a month option, which isnt that much cheaper to what they pay now

dahamsta

There's a lot of issues here...

Yes, the Regulator can set conditions, but only when the environment allows it. In this case, she was able to set conditions because the cable companies wanted something - price rises - and she had them on the back foot; it was a case of "you want $this, you have to do $that". With bitstream and flat-rate, Eircom are holding all the cards, and although she has the authority to mandate these - Regulators in other countries have done it, using the same European legislation - she's always aware that if she does, Eircom will litigate against her. At this stage though, I'm inclined to lean away from the Regulator, because her current stance doesn't appear to be having any affect. Perhaps it is having an affect, and we don't know about it, but the current lack of oversight is very troubling to me. At least if we were in the situation where the Regulator had mandated these services, and Eircom had litigated, we would know where we stand. Right now, we're in the dark, and I don't like that one bit.

The subject of leased lines and DSL is a tricky one, in that it's really not as simple as, "roll out DSL and all our leased line customers will switch and we'll lose a load of revenue". That's a gross simplification of the situation. Look at it like this: you own or manage a small company, with say 25 employees. You're paying X for a leased line at the moment, and someone rolls out DSL - the chances of you switching to DSL for Internet access are slim and none. For a start, a huge percentage of leased lines are used for inter-office communications, and the Internet is only a secondary consideration. On top of that, you've budgeted for a leased line, and the inconvenience of switching often simply isn't worth it. Yes, a small percentage of businesses will switch, but it won't be appreciable. The other people to consider here are future leased line customers, and let's be honest, if they're any good at what they do, it's only a matter of time before they switch to a leased line too.

The bugbear for Eircom is consumers, because they have an enormous cash cow with them at the moment. And don't leave the OLO's and the ISP's blameless here either - yes, Eircom are taking their cut of dialup revenue, but the OLO's and the ISP's are making a handy few quid out of it too - they wouldn't still be in business if they didn't. This is particularly true for the likes of Esat, who have significant market power with their multiple ISP's, and so can negotiate lower rates. What Eircom are trying to do is ignore the whole flat-rate argument, because if they do, users won't transfer particularly quickly to DSL, and so the prices won't be pushed down too quickly. They can start obscenely high, and slowly bring the prices down to just "high", and they're hoping people won't notice -- and let's be honest, the only people who will are us.

But there's another important consideration here, and that's analog V digital. Analog is dying now, and in five to fifteen years we'll all be looking back on it and laughing. Our kids will wonder what we were thinking, holding onto this outdated technology for so long. The future is digital, and that means voice over IP and packet communications, and an end to the use of the PSTN network as we know it now. Eircom can only hold off on this for so long, they have to transform themselves into a digital company at some stage, and the longer they postpone it, the more chance they have of losing the big battle. The problem we're faced with is that Valencia and Tony O'Reilly don't give a toss about that, they just want to divest themselves of Eircom at some time in the future at a profit. And that to me is somewhat paradoxical, because it's my view that the way their going, they're not going to be able to do that. They're going to have to do some work on Eircom while they retain control, and they seem lax to do that. And their loss is our loss...

adam

Snowbat

You can get a list of Chorus cable and MMDS franchise areas here:
http://www.google.com/search?q=cache:OKdkpNz0QkQC:www.odtr.ie/docs/pres160801.doc+%2B%22malahide%22+%2B%22swords%22&hl=en

murcielago

quote from murcielago of 01-12 -2001 07:18 PM

CHORUS RISES FROM CHAOS; Extract from Money & Jobs; Irish Examiner 30.11.2001
Colette Keane
..........
The ODTR did not appear to have the professional competence to evaluate the licence application from Chorus. It is common practice in other regulated industries to evalute an application according to certain fundamental criteria that include a) technical competence of the applicant, b) management and aministation competence of the applicant c) the applicant's (officers' & directors') repute including financial, criminal, previous history of problems in the regulated industry, d) financial resources e) human resources f) facilities & equipment g) a plan showing projected P&L and Balance Sheets for three years ahead. The licence will normally be for a stated maximum volume of business as measured by an appropriate method such as the number of subscribers (or number of people at a disco, for example). An applicant is usually required to put up a bond or deposit a certain sum of money with the regulator. It is also common to require the regulator (the regulator shall ..) to withdraw the licence in case of serious (specified) non compliance. Note it is not a matter of the regulator merely considering and then letting the culprit off with a caution. Zero tolerance applies. The directors and officers will be barred from from acting as such in the regulated industry.
The Chorus debacle of around last winter and early spring should have been seen as an indictment of the ODTR. Was there some reason for not firing the incumbent and closing down the entire ODTR?
I have not read the often mentioned Communications Bill. Does it deal with the matters I have listed? The phoenix phenomenon should not be tolerated in an industry that is so vital to the economic and social health of the country.
There is more that I could add. Perhaps it should be a new thread. But it follows logically from my submission of incompetence and/or commercial funny practices in every nook and cranny of the ICT business in this Republic of Tribunals (ROT)

[quote from emmet 27-01-2002 07:54 AM in responding to murcielago of 27-01-2002 04:43 PM

What it shows is that the regulator can attach conditions when operators are seeking increases which are under her remit to control and nothing else

I have no problem with emmet's amplification of the regulator's overall actual and aspirational role. The focus of my post and of various previous ones such as the above was on the regulator's quality responsibility in relation to the delivery of her licensed services.

I submit that quality management is an appropriate item for inclusion on the agenda for any debate on the present condition and future directions in the provision of telecommunications services in Ireland.

I accept I may be flogging a dead horse as far as this forum is concerned. Nobody appears interested in the non sexy aspects such as failures in the routine management of the 5 Ms of Man, Money, Machinery, Materials and Markets (or publics) or in the 4 Ps of marketing; Product Formulation, Pricing, Promotion and Place (distribution), all of which involve the routine management of information and communication.

The relevant section of P&T and ODTR its successor have been dismal failures in the area of quality management when dealing with relatively primitive technology. What guarantee can we have if and when we get broadband that it will be reliable and managed efficiently and effectively on a day to day and week to week etc. basis

murcielago

quote from dahamsta

Yes, the Regulator can set conditions, but only when the environment allows it. In this case, she was able to set conditions because the cable companies wanted something - price rises - and she had them on the back foot; it was a case of "you want $this, you have to do $that"

My point exactly. However, I am going a bit further back the line to the regulator's evaluation of the application and insertion of conditions in the original licence. How much authority does she have? Has anyone sighted the draft Telecommunications (Regulation) Bill and if so does it make the kind of provisions suggested by me?

realist

Originally posted by murcielago
I submit that quality management is an appropriate item for inclusion on the agenda for any debate on the present condition and future directions in the provision of telecommunications services in Ireland.

I accept I may be flogging a dead horse as far as this forum is concerned.[

Maybe it's just me, but I find it quite hard to get worked up about the quality of service of a non-existent service. When the battle over the provision of dsl / friaco has been won, then perhaps IOFFL can worry about the quality of the service.

You're flogging your dead horse in front of the cart, in a manner of speaking.

emmet

Originally posted by Boston



why does everybody say that, they will not losse there kleased lien business to adsl, adsl just isnt made for that type of thing









it just wouldnt be in hte same leauge, llu is more of a threat because sdsl can then be rolled out, which would detroy leased line business in this country,

I agree that LLU is the more significant issue, but my argument was that they would lose the exorbitant "small" leased line business almost entirely to ADSL. I stand by this assertion and never so much as implied, as you appear to have inferred, that ADSL is a suitable substitute for leased lines without limitation.







In fairness to you, I do admit that I tend to say "ADSL" when what I really mean is "half-decent bandwidth delivered over existing copper that doesn't cost an arm and a leg". So, if your point is entirely related to the technical minutiae of the presence or absence of directional data rate equality, we have no argument.






To clarify, I would argue that if a technology delivers 10 times the bang per buck of existing leased lines up to a bandwidth of "X" bps, then revenue accruing from leased lines up to "X" bps are going to go down. The flavour of DSL or whether it is DSL at all doesn't really matter. I'm certainly open to, say, WLL if it's cost-effective.







Being tired of being laughed at by people in places where bandwidth is cheap, I have strongly considered at least a 64k leased line, but about the best price I could get was 5k (IRP) PA. I never went ahead with it because I'd rather suffer the bandwidth pain and have to explain the situation than fork over money under conditions I consider tantamount to extortion --- I know people here paying (IIRC) something between 15k and 20k for 1Mbps leased lines --- in some cases some flavours of DSL would not be a suitable substitute, but in most cases it would be very acceptable and much, much cheaper.







I imagine that leased lines up to, say, 1Mbps would all but disappear with a successful *DSL rollout.







Emmet.

dahamsta

I imagine that leased lines up to, say, 1Mbps would all but disappear with a successful *DSL rollout.

I don't think they'll get much /new/ business in that band, in the areas that xDSL is available, but I can't see everyone with an existing leased line <1Mbps switching over. Some people will, sure, but I honestly doubt it will be that appreciable. When the leased line is actually installed, the difference in cost V the difference in quality would negate the bother of doing it. IMHO of course.

adam

spongebob

Hi

There is a huge diff between 512k adsl and 512k leased, not least being the lack of security inherent in dsl over leased when it comes to firewalling.

Othe probs are the inability to run servers inside an adsl line (not a problem for most companies) and the crappy service level agreements and service interruptions.

It will replace ISDN dialup big time.

M

emmet

Originally posted by dahamsta
I imagine that leased lines up to, say, 1Mbps would all but disappear with a successful *DSL rollout.



I don't think they'll get much /new/ business in that band, in the areas that xDSL is available, but I can't see everyone with an existing leased line <1Mbps switching over. Some people will, sure, but I honestly doubt it will be that appreciable. When the leased line is actually installed, the difference in cost V the difference in quality would negate the bother of doing it. IMHO of course.



adam

I don't agree. If you're leased line is a piddling 1Mbps, then the likelihood is that your use is asymmetric anyway -- I know that I wouldn't run a serious server at the end of such a link with, probably, ISDN for backup.

Right now, 256k leased line costs 12k euro PA, whereas *DSL will cost about 10% of this figure (if it retails at 100 euro PM). You can be damn sure that many (but, I agree, not all) users of small* leased lines would be perfectly happy to accept poor SLAs, a little less bandwidth, and all of the disadvantages of *DSL vs leased line for such a colossal saving.

* By "small" I mean less than 1Mbps. I do think that it depends on the individual user/company involved. If I had a 256kbps leased line (which I don't), I know that I'd drop it in a heartbeat for ADSL to save 10,800 euro every year.

Cheers,

Emmet.

dahamsta

I don't agree. If you're leased line is a piddling 1Mbps, then the likelihood is that your use is asymmetric anyway -- I know that I wouldn't run a serious server at the end of such a link with, probably, ISDN for backup.

I've been in a co-location room run with exactly that setup Emmet, and as far as I can remember, the leased line was substantially less that 1Mbps. Not a small business server room, but a co-location room. I'm not saying it's a good thing, but such is life in Ireland.

Right now, 256k leased line costs 12k euro PA, whereas *DSL will cost about 10% of this figure (if it retails at 100 euro PM).

Well, unfortunately pricing is something we can't really get into, because we haven't a notion what it will be. On the bitstream side, it's unlikely pricing will be /higher/ than Eircom's current proposed pricing, but even if it's lower, we don't know what their contracts are going to look like. They could expressly forbid customers from using the lower-end products in multi-user/business environments, and they could enforce it if they chose to (admittedly unlikely).

On the LLU side, there's nothing stopping Esat rolling out and running their xDSL service in exactly the same way Eircom have been running theirs for years, with HDSL "leased lines" selling for only slightly less than (or even the same as) "proper" fibre leased lines. There would probably be an uproar if they did, but we're used to uproars.

Of course, we won't know the answers until the products are rolled out, and it's quite possible that the pricing and contracts /will/ be competitive, but you know as well as I do that Eircom and the OLO's will fight against competitiveness as hard as they possibly can. So if the pricing is high, or the contracts are restrictive, there really won't be much of an incentive for operations managers to recommend a change, especially after a hefty layout on installation.

In other words, I'm not saying you're wrong, I'm just saying that if Eircom and the OLO's continue to act in an anti-competitive manner, I can't see there being a substantial immediate shift to xDSL. A shift yes, but not particularly appreciable. But I could be wrong, I often am.

You can be damn sure that many (but, I agree, not all) users of small* leased lines would be perfectly happy to accept poor SLAs, a little less bandwidth, and all of the disadvantages of *DSL vs leased line for such a colossal saving.

Indeed, if it's colossal, and if the contracts permit it.

adam