Irish Times: Home Net users pay high price for link-up

timod

Great Article:

Congratulations.

http://www.ireland.com/newspaper/finance/2002/0517/4005960216BWFAMONLINE.html

Home Net users pay high price for link-up

High costs mean many people cannot afford to use Net until after 6 p.m., and there is no flat-rate, unmetered-access product available, writes Clare O'Dea

It's a peculiar form of torture waiting for minutes for a website to open or a file to download, while you are paying per second for the privilege on your home PC. But as long as the only alternative service is prohibitively expensive, most home users put up with it by keeping online time to a minimum.

The latest quarterly survey from the Office of the Director of Telecommunications Regulation (ODTR) shows that the average number of hours spent online per user per month in the Republic was 4:05, compared to 11:27 in the US and 6:45 in the UK.

Currently, Irish residential internet-users pay for access through a pricing model that was designed for telephone calls. Because of the per second/minute billing model many people cannot afford to use the Net and high users face high bills.

Unmetered access would mean that the calls to the internet would be free and that users would gain access simply by paying a fixed monthly subscription. It's not available here yet.

There are several basic flat rate products missing from the picture, in particular:

Always-on internet access working at the existing 56K modem speed. This is adequate for email and light users without big downloading requirements. In the UK, this type of access retails at around €22.41 per month tied to one PC and €25.61 per month for connection from any PC.

The next step up - a residential broadband offering - is for the more serious home users. Speed is what matters for surfers who want to download large digital material or use content-rich multimedia sites. It also allows users to listen to worldwide radio online. The UK market shows that this group would be prepared to pay up to €50 per month for this service.

The next offering that is required is something with very fast speeds suitable for the small business sector or remote workers.

So what is stopping us from getting these services? Depending on your perspective, the impasse can be blamed on one or all of the following: the regulations, the regulator, and the dominant company operating the network, Eircom.

Other telecoms companies cannot sell flat-rate unmetered connection to the consumer until Eircom provides them with an unmetered interconnection wholesale product. This hasn't happened yet.

An Eircom spokeswoman explained that it was very difficult to find a viable cost-based model for a wholesale flat-rate product because the costs are variable while the revenue is fixed. "At the moment we are focused on flat rate through ADSL and we have invested €125 million in that area."

The spokeswoman said that Eircom would continue to monitor the market for other products and respond accordingly.

Eircom's latest broadband offering i-stream, launched earlier this month, could not be considered a mainstream residential product because of its high pricing level. A minimum 12-month contract will cost €1,667.38, including €175.45 for the modem required to connect to the service, an initial connection fee of €199.65, and a monthly charge of €107.69.

The entry-level product, i-stream solo, is capped, meaning that anything downloaded above the 3 gigabit limit is charged at €0.0363 per megabit. A similar service in the UK from BT Openworld costs the user €48.03 a month.

Forfás in its report Broadband Investment in Ireland - Review of progress and key policy requirements update 2002, stated the following: "Significant profits from timed internet access are acting as a deterrent to operators providing always-on broadband access to business. The regulator should have the power to mandate to Eircom to introduce a fixed-rate narrowband interconnect product which would allow competing operators to offer always-on services at cost-orientated prices for basic and ISDN services."

The report noted that in 2001, the UK regulator ordered a fixed-rate programme to be introduced, enabling a range of service providers to offer always-on internet access at affordable rates.

This advice was not taken up when the Telecommunications Bill 2002 was debated just before the Dáil was dissolved. IrelandOffline, a consumer interest group campaigning for affordable internet access for homes and small businesses, believes there is sufficient strength in the directives currently in place to enable the regulator to force flat rate. However, the ODTR has not acted yet in this area.

An ODTR spokesman said that a wholesale, flat-rate, internet-access product could only be mandated if Eircom introduced its own retail offering or if another licensed operator made a reasonable request to Eircom for a wholesale package. In the latter case, "the office can intervene if the negotiations progress slowly or if either party requests it", he said.

The ODTR's position, he said, was that it did not have the power to mandate a product in response to consumer need.

Mr David Long, chairman of IrelandOffline, argues that online activity in the Republic is being curtailed by clock watching and people waiting until after 6 p.m. to use the internet. "The fear of running up a huge bill and the lack of a fixed cost for people and businesses going online stifles internet use."

There are currently two main types of internet service provider (ISP) for home users, with different charging structures. Anyone with a personal computer needs an ISP to access the internet.

With subscription ISPs, the user pays a monthly or yearly fee and internet access calls are charged at a rate, usually 1891, which is cheaper than regular local phone calls. The 1891 rates are 1.61 cents per minute, 8 a.m. to 6 p.m., Monday to Friday, and 0.8 cents per minute after 6 p.m. and at weekends, with a minimum charge of 5.244 cent.

ISPs in this category include Eircom Net, IOL Gold from Esat Fusion, Indigo and Connect Ireland. The monthly subscription ranges from €12.70 to €19.

The second type of ISP is marketed as "free access'. The user connects after downloading material from the ISP's free compact disc. From that point on, internet access is usually charged at local phone call rates.

Eircom Net, Oceanfree.net and IOL Free from Esat Fusion, Indigo, Unison and UTV are the main providers in the "free access" category. Call charges vary depending on what home phone company you use and some, including Eircom, have minimum charges.

The latest ODTR consumer survey showed that 44 per cent of respondents had access to the Internet at home, an increase of 7 per cent since October 2001. So internet penetration is continuing to grow apace while the access products markets is far from dynamic.

"Irish users need a flat-rate, dial-up product, which would allow them to go online any time of day for a fixed monthly fee. This freedom will act as a catalyst to develop the full potential of the internet," Mr Long said.

Dangger

Doh , I was up all night waiting fot that paper to be delivered, you beat me to it , again! Its all there all right, the most comprehensive piece to date, I feel. Fitting that its out on World Telecommunications Day.

KdjaCL

Great article .
But there is some information missing .
UTV have been "trying" to set up Flat rate down here for a while and have ben hampered by the ODTR and Eircom.
kdja

Jpaulik

I thought UTV never applied for flat rate from Eircom.

Great article by the way, well done IrelandOffline again.

MDR

An ODTR spokesman said that a wholesale, flat-rate, internet-access product could only be mandated if Eircom introduced its own retail offering or if another licensed operator made a reasonable request to Eircom for a wholesale package. In the latter case, "the office can intervene if the negotiations progress slowly or if either party requests it", he said.

hum ...

MDR

Oh yeah,

give credit where credit is due,

Well Done David!

dahamsta

Currently, Irish residential internet-users pay for access through a pricing model that was designed for telephone calls. Because of the per second/minute billing model many people cannot afford to use the Net and high users face high bills.

Yeah man, groovy.

Good article.

adam

timod

Originally posted by Dangger
Doh , I was up all night waiting fot that paper to be delivered, you beat me to it , again!

hehehe... apologies

neverhappen

Quote from the Esat meeting on 11th April...

Are negotiations on-going with Eircom about a FRIACO style deal?
Negotiations have never technically stopped although Eircom have consistently frustrated them to the extent that ESAT cannot afford to keep resources on a project that does not appear to have an early conclusion in sight and where the timeframe is not in their control.

.

Quote from the ODTR in today article in the times...

"the office can intervene if the negotiations progress slowly or if either party requests it"

Does this mean the ODTR has grounds to intervene ?

Negotiations have undeniably progressed slowly.

Jpaulik

All esat need to do is say it to the ODTR. Didn't David ask them to tell the ODTR they were having problems last September at the IrelandOffline event ?

neverhappen

All esat need to do is say it to the ODTR. Didn't David ask them to tell the ODTR they were having problems last September at the IrelandOffline event ?

Yeah, but look at the quote again...

"the office can intervene if the negotiations progress slowly or if either party requests it"

aidan_dunne

What I can't understand is why haven't Esat actually gone to the ODTR and requested FRIACO if Eircom have been holding up/stalling/frustrating the negotiations? They must have realised a long time ago that Eircom weren't going to give in so why didn't they just go to the ODTR and ask them to intervene. Esat are still trying to negotiate with Eircom but don't seem to be getting anywhere so why do they continue to bother with Eircom. They should be going to the ODTR at this stage, not trying to flog a dead horse with Eircom.

Or is it, perhaps, that even Esat aren't too bothered whether FRIACO is introduced or not? Maybe there is some kind of cosy cartel between Esat and Eircom and they are saying that they are negotiating with Eircom but both parties have secretly agreed to sit back and just try to milk the per-minute dial-up model for as much as they can. I know, I know, sounds very conspiratorial but I was always one for a good conspiracy theory! lol

Dustaz

Jaysus talk about reaching the masses. My mum is now an expert on the 'intraweb situation' in Ireland, she informed me of this in a phonecall today about how i should join up with those lads in 'Ireland Online'.

well done lads, this is a nice little coup in terms of publicity

aidan_dunne

great article and great work by David. You've done us all proud, boy! lol

oscarBravo

Originally posted by aidan_dunne
What I can't understand is why haven't Esat actually gone to the ODTR and requested FRIACO if Eircom have been holding up/stalling/frustrating the negotiations?

This question keeps coming up, and we have yet to hear a satisfactory explanation from Esat. As pointed out, David formally asked Esat in a public setting to complain to the ODTR. We keep hearing how the ODTR can't intervene unless one party asks them to, and we keep hearing that Esat are frustrated by Eircom's stalling techniques.

David, have you put this question directly to Esat? Because someone somewhere is stringing us along. Aidan's conspiracy theory bears repeating:

Or is it, perhaps, that even Esat aren't too bothered whether FRIACO is introduced or not? Maybe there is some kind of cosy cartel between Esat and Eircom and they are saying that they are negotiating with Eircom but both parties have secretly agreed to sit back and just try to milk the per-minute dial-up model for as much as they can.

If this is were the case (and far be it from me to suggest that honourable businesses would ever contemplate such a thing :rolleyes: ) -- or even if the possibility existed -- surely the regulator has a responsibility to ensure that the process gets moved on, for the sake of all Irish Internet users.

Or just slap my @ss and call me naive...