Yet another line rental increase imminent

dahamsta · 13-01-2004 3:13pm

Line rental price hike stuns Esat BT
Tuesday, January 13 2004
by Dick O'Brien

Esat BT has said it is 'absolutely staggered' that Eircom has moved to increase its line rental charges by about 8 percent to EUR24.18 from EUR22.50 per month.

Line rental in Ireland has not yet been deregulated and customers of rival telecoms operators to Eircom still have to pay line rental to the former state firm. "Line rental is still not open to competition and Eircom are pushing all of their prices increases through in this sector. This price increase affects everybody's customers, not just Eircom's," said Esat BT's director of communications Una McGirr. She said that this was the third price increase in less than twelve months and estimated that it had added EUR27 million to Eircom's bottom line and claimed that the three price increases together would add EUR100 million.

Esat BT has been quite vocal of late in calling for the prompt introduction of wholesale line rental, which will enable competing firms to offer line rental directly to customers. McGirr on Tuesday speculated that these recent price increases would be used by Eircom to justify a higher price for wholesale line rental than may previously had been expected.

[...]

MDR · 13-01-2004 3:19pm

nuts,

I thought we had a damn fast turn around considering .... )C:

Gadgie · 13-01-2004 3:19pm

I thought the last increase was approved by Comreg to facilitate wholesale line rental, was it not? If so, where the hell is it?

****ing eircom bastards. :mad:

dahamsta · 13-01-2004 3:21pm

Good to have someone active involved Dermot, but did you really have to start a new thread?

Moriarty · 13-01-2004 3:27pm

Threads merged.

vinnyfitz · 13-01-2004 3:39pm

According to RTE its already been approved by Comreg!

FFS - I thought they only applied this morning!

http://www.rte.ie/news/2004/0113/eircom.html

MDR · 13-01-2004 3:41pm

don't think we can blame this one entirely on COMREG ,
just re-inforces we are fighting a loosing battle with Eircom,
and need alternative infrastructure.

Sleipnir · 13-01-2004 3:44pm

But how could Comreg possibly justify 3 price increases in one year?
I mean come on, an increase every 4 months!?!?

hmmm · 13-01-2004 3:44pm

You know, sometimes we accuse Comreg of acting too slow. I'm glad to see that when it comes to Eircom price rises they spring into action.

http://www.ireland.com/newspaper/breaking/2004/0113/breaking47.htm

Comreg approves Eircom 8% line rental hike
By Luke Cassidy Last updated: 13-01-04, 13:12

The Commission for Communications Regulation (ComReg) has approved Eircom's request for an increase in the cost of telephone line rentals to around €24.

The telecom regulator approved the increase from February 4th, making it the the third successive increase in telephone-line rental in a year.

Eircom's line rental charges for residential consumers are currently the highest in the European Union at €22.50. The proposed increase in line rental would push the monthly fee to €24.30, almost €10 higher than the EU average for line rental during 2003 of about €14.

A recent EU report published on the telecommunications market highlighted that Eircom's 2003 monthly line rental was about €9 more than Britain's fee and €9.50 more than France's fee.

Mr Dermot Jewell from the Consumers' Association criticised Eircom by saying it was "obvious they [Eircom] have no interest in the impact the increases are having on their customers."

He said there were "thousands of customers who rely on line rentals with no option to shop around." This increase, he said, was "one more too much."

The Progressive Democrats communications spokesman, Senator Tom Morrissey, called Eircom's request an "outrage", and added: "Eircom users are getting increasingly frustrated at rising phone costs and justifiably so. Today's announcement is a real slap in the face."

The Labour Party's Mr Tommy Broughan said: "The consumer is being utterly exploited by Eircom. No matter where the phone user turns, they face ever-increasing costs."

MDR · 13-01-2004 3:46pm

apparentily they have agreed a 'pricing basket' with Eircom,
and as long as Eircom keeps within that overall basket they
can increase Line Rental.

I understand it entirely myself ...

Ripwave · 13-01-2004 4:35pm

Originally posted by Kananga
But how could Comreg possibly justify 3 price increases in one year?
I mean come on, an increase every 4 months!?!?

ComRegs position on this is that they don't have any power to stop it. They set a cap of the rate of inflation on a "basket" of eircom prices. So if oreillycom drop their prices in one part of the basket, they can increase it in other parts of the basket my greater than the rate of inflation.

(ComReg won't tell me how this "basket breaks down".)

oreillycom face competition for call charges and broadband, so the drop their prices there. They don't face any competition on Line rental, so they increase their prices there, by the rate of inflation plus whatever they've "saved" from the decreases that are forced on them by competition. The end result is that anyone who signs up for CPS with a 3rd party end up subsidising oreillycom to compete against their chosen CPS provider.

ComReg have argued that Wholesale Line Rental will "bring competition to the Line Rental" market. But oreillycom will still set the wholesale rate that other providers are charged. So there won't be any real competition, just a "margin" that WLR operators can play with (and anyway, oreillycom increase the line rental for everyone last year, to make up for the loss of this margin for the small percentage of users who might adopt a WLR package).

dahamsta · 13-01-2004 4:56pm

Consumers Association slams latest rise in Eircom charges
13/01/2004 - 1:59:51 pm

The Consumers Association has criticised the communications regulator’s decision to approve a 7.5% increase in Eircom’s fixed-line rental rates.

The increase, which takes effect on February 4, will bring the monthly rental rate to almost €24, one of the highest in the European Union. It will also be the third increase in the rate since the beginning of last year.

The Consumers Association has blamed a lack of competition in the telecommunications sector for the fact that Eircom can get away with such "unacceptable" price hikes.

http://www.breakingnews.ie/contact.asp

mike65 · 13-01-2004 5:07pm

I think IOFFL should be sending that statement directly to David McWilliams, Pat Kenny,
George Hook, The Sunday Business Show, The Register(!) and anyone else we can think of...

but what do we actually do beyond a well worded press release...?

Mike.

Capt'n Midnight · 13-01-2004 5:12pm

Originally posted by dwoodgate
Rest assured also that as soon as an alternative to your leased line comes available I will take that too.

Dermot

On bottom left of "whats new" green bar on www.comreg.ie
ComReg03/133 'In-Situ' Transfer of Leased Lines -Benefits to individuals and companies renting a leased line-

Thursday, November 20, 2003

Individuals/Companies can now choose an alternative provider for the leased line without a break in service and where equipment is already in place it is not necessary to pay full connection fee.
What's the catch ?

Cabaal · 13-01-2004 5:20pm

Originally posted by Kananga
But how could Comreg possibly justify 3 price increases in one year?
I mean come on, an increase every 4 months!?!?

if it keeps going at this rate in a few years line rental will cost as much as broadband per month

Maybe thats there plan?

Cuauhtemoc · 13-01-2004 5:36pm

I think i asked this before but...could Esat not start offering phone services over their unbundled lines?
Someone may know if that's feasible or cost effective.
Would be some sort of start wouldn't it?

On another note Eircom should be compelled to sell the last mile of the phone network to an independent body for fair regulation and management.
All telcos could then operate on a more level playing field, in the same way as the government plan to hang on to the esb grid if they are ever sold.
How such a monopoly can be allowed to exist is ridiculous. Never happen i know but one can dream!
________
C.

Ripwave · 13-01-2004 6:04pm

Originally posted by Cuauhtemoc
I think i asked this before but...could Esat not start offering phone services over their unbundled lines?

Because of failures at ComReg, LLU isn't economically feasible.

dahamsta · 13-01-2004 6:11pm

Um, this "basket" that's been mentioned, the hermetically sealed one? If this is true, the line rental increase has effectively been approved by dint of the DSL decrease, yes? However the wholesale decrease is far lower than the retail decrease and of course line rental hasn't (effectively) been deregulated yet, so isn't this automatically anti-competive?

By the way, there's no way in hell this "basket" (if it exists of course) should be a secret (if Ripwave is correct). The fact that it is (ditto the last bracket) should make IrelandOffline extremely suspicious. Why do the contents need to be hidden?

The whole things stinks to high heaven.

adam

Ripwave · 13-01-2004 6:38pm

Originally posted by dahamsta
Um, this "basket" that's been mentioned, the hermetically sealed one? If this is true, the line rental increase has effectively been approved by dint of the DSL decrease, yes?

No. Broadband makes up a timy fraction of the cost of telecommunications in Ireland. Even for those that have Broadband, it's probably responsible for less than half of total communications costs (spread over all BB users - I'm sure there are people who don't make any phonecalls), and less than 5% of oreillycoms customers have broadband, so it's a miniscule part of the "basket" (if it's even included).

The decreases that oreillycom will be offsetting against the increased linerental will be the recently promoted lowered call charges to Europe, and cuts in termination charges for some mobile communications.

Ripwave · 13-01-2004 6:49pm

Originally posted by dahamsta
By the way, there's no way in hell this "basket" (if it exists of course) should be a secret (if Ripwave is correct). The fact that it is (ditto the last bracket) should make IrelandOffline extremely suspicious. Why do the contents need to be hidden?

I didn't say it was secret. I said that they wouldn't tell me what how it was made up when I asked. In one of a series of responses from ComReg, a Mr Paul Brennan "explained" to me how, if CPI was 5% Eircom could only increase the Line Rental by 10% if the basket had a hypothetical weighting of 50%. When I responded that if the weighting was only 10%, they could raise Line Rental by 50%, and asked if the weightings were published he simply ignored that point, and insisted that "ComReg is satisfied that there is no margin squeeze and that eircom's
wholesale price is cost orientated." (I assume he was responding to my questions about WLR in the same note. The concept of inline-quoting was obviously beyond him, and he "top posted" his response).

Never ascribe to malice, that which can be explained by incompetence.

dahamsta · 13-01-2004 6:59pm

Originally posted by Ripwave
Never ascribe to malice, that which can be explained by incompetence.

That's one of your favourites, ain't it Ripwave?

Ok, let's assume that the guy in Comreg is a moron so -- does IrelandOffline know what's in this delightfully woody metaphor?

adam

spongebob · 13-01-2004 7:05pm

Ripqwave said that the composition of the Basket is a state secret so only Eircom and Comreg 'know' it.

Another state secret is the result of the consultayion in late October on the USO and on a definition of "Functional Internet Accesss" which is supposed to be supported on all of these rather expensive lines.

Last I heard that definition was still 0k , thats what Eircom mean by 'basket', they charge the highest price in the whole of the EU for a basket case of a line.

m

vinnyfitz · 13-01-2004 7:52pm

on RTE radio Business news now 18.50

dahamsta · 13-01-2004 8:05pm

Keep missing these shows. What did Comreg's new fearless leader have to say for himself vinnyfitz?

dahamsta · 13-01-2004 8:11pm

http://adam.beecher.net/pheed/?thvbzx

ALTO, the Irish association representing alternative operators in the communications market, commented on Eircom's decision to increase line rental, calling the move a "blatant abuse of market power." The association has called on Minister for Communications, Dermot Ahern, to intervene. Meanwhile, consumer group Ireland Offline also weighed in on the move, with Chairman Christian Cooke saying, "It is blatantly apparent to the Irish consumer that Eircom is not serious about offering value for money."

vinnyfitz · 13-01-2004 8:13pm

He got off pretty lightly I'm afraid.
Said he wasn't justifying the increase but that it was in the context of the agreement with Eircom;
Regretted they did not release price changes at the same time so as to assist transparency;
promissed he'd keep price increases from Eircom below inflation for the next several years;
defended the overall record of prices going down 30 to 40% over the last few years.

Was not sufficiently pressed by RTE on the point that people have no option but to rent Eircom's lines. McRedmond in a separate piece had the nerve to say anyone can put thier own lines in the ground - that Eircon is not a monopoly here.!

Alto clip also played - strong cranky language employed.

Seems to me we really need to contest this principle that line rental is part of a basket. Why would Eircon apply any future price increases to anything other than line rental if they want to screw the most out of the market and ComReg accept that price increases within the basket can be configured however Eircom wishes?

Ripwave · 13-01-2004 8:47pm

Originally posted by vinnyfitz
Was not sufficiently pressed by RTE on the point that people have no option but to rent Eircom's lines. McRedmond in a separate piece had the nerve to say anyone can put thier own lines in the ground - that Eircon is not a monopoly here.!

I've asked this before and never got an answer. With 50,000 new homes being built every year, does anyone know why nobody else is supplying these wires? Does anyone know if there are any licensing provisions that prevent NTL, Chorus or ESAT, or anyone else for that matter, doing this?

wexfordman · 13-01-2004 8:50pm

Ripwave,

I would reckon its more down to the "economic feasibilty" of it!!!!, than any regulatory issues. (Seriously)

Wexfordman

dahamsta · 13-01-2004 8:54pm

Thanks for the report vinnyfitz.

promissed he'd keep price increases from Eircom below inflation for the next several years;

A very bold statement to make, one wonders how he can make it with such confidence. I hope Eircom and Comreg don't have some kind of agreement. Just in case though, I've just written it on the wall in front of me, in big black marker, with the date and Doherty's name underneath. Just as a reminder.

defended the overall record of prices going down 30 to 40% over the last few years.

Sorry John, but that won't fly with us. You can't weigh those price drops against a product that remains, bizarrely, almost completely in the hands of one company. When are you going to fix this John? When are these offensive, disgusting Eircom bills going to stop dropping on my poor doormat?

McRedmond in a separate piece had the nerve to say anyone can put thier own lines in the ground - that Eircon is not a monopoly here.!

I had this with an Eircom engineer only the other day. He said, quote: "Eircom installed all these lines, but any other company can come along and do the same." To which I replied: "I'll just correct you on one point there: Telecom Eireann installed all those lines, with our money. Not Eircom." He went on about Eircom investment in the network, and insisted that Eircom had invested substantial sums of money since. I didn't argue further, because the last time I got into an extended argument with an Eircom engineer I nearly gave the poor fecker a coronary. But the ailing copper he was trying to fix was proof enough for me.

Seems to me we really need to contest this principle that line rental is part of a basket.

Absolutely.

adam

Ripwave · 13-01-2004 9:09pm

Originally posted by dahamsta
"I'll just correct you on one point there: Telecom Eireann installed all those lines, with our money. Not Eircom."

This is why I've decided to only refer to reillycom in future on boards. It's important to break the attitude that so many people have that eircom is "our" telcoms company. It's not meant as a snide comment, and it isn't "jokey" or disparaging, but it's a fair comment and sends the message that we're not going to allow this private company to get away with pretending to be our national telco.

Yet another line rental increase imminent

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