ComReg and Eircom off to court AGAIN X 2 - Times

crawler

http://www.irishtimes.com/newspaper/finance/2009/0213/1233867935506.html

Good accurate reporting by JC.

Eircom to contest pricing decision

JOHN COLLINS

EIRCOM IS expected to seek a judicial review over a decision by telecoms regulator ComReg that four of its products that bundle mobile and fixed-line telephone services with broadband do not comply with telecoms regulations.

ComReg issued a decision this week that effectively found that four Eircom Talktime Family and Broadband bundles are being sold too cheaply. The bundles, which cost €45-60 a month, include unlimited calls from Eircom land lines to mobile phones on the Meteor network, which Eircom owns.

Industry sources said this effectively meant Eircom was using its dominance in the fixed-line market, where it has about 70 per cent market share, to encourage customers to switch to its mobile subsidiary. Significant numbers of Eircom customers were switching their mobile phones to Meteor from other networks to avail of the free calls.

It is understood mobile operator Vodafone formally complained to the regulator about the offers. A Vodafone spokeswoman said last night that the company did not comment on its private dealings with ComReg.

Eircom released a statement which questioned the decision.

“Eircom believes that ComReg’s efforts to force Eircom to increase its rates for the bundles in question are misguided and wrong,” it said in the statement. “Eircom will fight for our right to compete and our customers’ rights to great services and will pursue all avenues to ensure that our customers can continue to take these bundles at competitive prices.”

If Eircom does not remedy the matter within 30 days, ComReg can seek an enforcement order in the High Court.

Ronan Lutpon of Alto, which represents other telecoms operators, called for ComReg to take “affirmative action” if Eircom did not comply.

bealtine

crawler wrote: »

http://www.irishtimes.com/newspaper/finance/2009/0213/1233867935506.html


It is understood mobile operator Vodafone formally complained to the regulator about the offers.

Call me sceptical if you will and I do have a fair grasp of the regulatory minefield here (and also the consequences of monopoly behaviour).

But the regulator seems to only takes action when prices come down. That seems insane to me. Vodafone have a similar setup in that they have a fixed line business too, why can't they offer a similar package? They may even end up owning BT's business too. Are they afraid of a price war?

They are only like moaning to the regulator when it eats into THEIR ARPU. They are, in this case, using the regulator to enforce high prices which of course suits the regulator.

Need I remind everyone that the ARPU in Ireland is still one of the highest
in the EU and weren't Vodafone the ones that muttered on about "it's because we talk more", that was a really pathetic excuse for their reasons for price gouging.

While I'm on the subject, the line rental is still the highest in the EU too.
Wouldn't the regulator be better served in forcing prices down like they are supposed to be doing instead of forcing prices up? In these straitened times I'd like to see line rental come down to the EU average.

In this case I have no sympathy what so ever for Vodafone. Bunch of thieves using the regulator like that.

Comreg are utterly useless for the consumers of Ireland and should be abolished

watty

The regulator isn't directly there for the Consumer, but to create a "level playing field" for the Suppliers.

bealtine

watty wrote: »

The regulator isn't directly there for the Consumer, but to create a "level playing field" for the Suppliers.

Indeed.
That's not what is in the legislation or in their definition of themselves.
Competition maybe?
"encouraging innovation" maybe?

But then they actually do neither of these functions...

Comreg's definition of themselves : "We are responsible for promoting competition, for protecting consumers and for encouraging innovation."
http://www.comreg.ie/about_us/roles_what_we_do.523.html

So where does it say "level playing field for Suppliers"?
So why don't they get on with their primary objectives?

Instead they are ignoring their objectives and "making up something" else
by regulating FOR the industry and forgetting they are there *specifically* to protect consumers.

So in effect they don't do what they are supposed to be doing so what's the point of them?

watty

Outdate Thacher/Reagan thinking is that by getting new entrants and a level playing field for Vendors, with as little regulation as possible (light touch) you will ultimately benefit Consumers. By this logic you must not upset the vendors and the complaints of the consumers are obviously a short term thing that will go away if you ignore them as the market develops

A recent report on Royal mail and the last 10 years of Irish Telecom progress shows the validity of these philosophies.

The way Comreg is funded might be a problem too. The consumer pays none of the bills directly, he who pays the piper etc.

SkepticOne

The problem for the consumer in this instance is that what ComReg calls "competition" is really a bunch of people reselling Eircom "wholesale" products. They don't care about the consumer being charged high prices so long as they get a cut of the pie. Without ever getting your hands dirty you can operate a telephone company in Ireland purely through reselling products and packaging them in varous ways, but prices are kept high through a relatively high wholesale price. Now ComReg combines the views of Eircom with those of all these resellers and the result is what we see.

ComReg is able to tell the EU that there's 100% competiton at he last mile level simply because Eircom are forced to allow other companies to bill for line rental. We know this is not really competition. Real competition is what is provided by UPC with their broadband and telephone services that don't use Eircom. Also Digiweb and other companies with wireless services.

So the problem is not so much that competition does not work but that what is being presented to us here as competition is not really such.

Get rid of this rigged against the consumer "wholesale" setup and real competition will appear and the consumer will benefit. I put "wholesale" in brackets because it has nothing to do with the real world concept of wholesale. This is an artificial construct designed to give the illusion of competition. But it suits the existing "players" so it continues.

thebman

The illusion of choice really. You can be charged for eircom by whichever company you choose.

Hurray for name changing on the bill! Hey, why is the price still the same?

bealtine

SkepticOne wrote: »

The problem for the consumer in this instance is that what ComReg calls "competition" is really a bunch of people reselling Eircom "wholesale" products. T

. But it suits the existing "players" so it continues.

It also very much suits the regulator to keep prices artificially high, they get their slice of the pie too.
In effect there is no regulatory will to change the situation. All the keys players benefit from this illusory setup.
So my point is if we (as in Ireland) were to examine and change the way comreg is funded then they might be more willing to actually do some regulation. They just like threatening people and talking regulator speek(tm).

The big problem as I see it is that the line rental having been set so high that it is actually a disincentive for telcos to invest. Why invest when you can do almost nothing and still get paid? Roll out two bits of string and you still get paid. So quality of line should determine the amount paid in line rental. In most other countries the line rental taxes have fallen or at least remained stationary.
If your line can't get broadband then you pay say €12/month.
The bb price should be on top of that and the levy added.

So say for instance a levy on all broadband connections is charged and the line rental drops to the EU average. So the more broadband the telcos roll out the more income comreg gets. Also the more income the telco gets as they now have an incentive to roll out broadband too.
Simple really, they could even get more than they do now...and things would get better broadband wise almost overnight.

On an ideological front privatisation of utilities has been a disaster in most countries.

crawler

eircom neglected one teeny tiny detail in talking about being "forced to increase prices" - they could just lower the wholesale price, that also solves the problem...ya gotta love the spin Doctors...

bealtine

crawler wrote: »

eircom neglected one teeny tiny detail in talking about being "forced to increase prices" - they could just lower the wholesale price, that also solves the problem...ya gotta love the spin Doctors...

Indeed.

But then so could Vodafone:)
In fact everybody should drop their prices (wholesale or otherwise) if they want to weather this "credit crunchie".

Isn't this what the Taoiseach was talking about only recently?

bealtine

crawler wrote: »

eircom neglected one teeny tiny detail in talking about being "forced to increase prices" - they could just lower the wholesale price, that also solves the problem...ya gotta love the spin Doctors...

Smart Telecom hits out at Eircom’s ‘bundles’ battle

13.02.2009
Eircom’s decision to launch a judicial review against the Commission for Communications Regulation (ComReg) has raised the ire of broadband and telecoms provider Smart Telecom, which argues Eircom has an unfair advantage in the market.

Today, Eircom said it intended to fight a notice by ComReg to desist from selling bundles of broadband, phone services and free calls to its mobile subsidiary Meteor’s network for between between €45 and €60 a month, for its Talktime Family and Broadband products.

ComReg received a complaint that Eircom was using its dominance to drive customers to use services from its Meteor mobile subsidiary, which has 27pc of the mobile market.

ComReg this week announced that it believes Eircom’s prices for 1Mbps and 3Mbps Talktime Family and Broadband bundles are too low.

Eircom told siliconrepublic.com today that it intends to launch a judicial review before the 30-day notice period ends.

In a statement Eircom said: “Eircom believes that ComReg’s efforts to force Eircom to increase its rates for the bundles in question are misguided and wrong. Eircom will fight for our right to compete and our customers rights to great services, and will pursue all avenues to ensure our customers can continue to avail of these bundles at competitive prices.”

However, regulatory director at Smart Telecom, John Quinn, questioned Eircom’s assertion that its bundles were good for competition. “Eircom is selling 1Mbps broadband for €9 in a bundle – yet charges operators €9.48 (€11.52 including VAT) at the wholesale rate. This is not good for competition and forces operators to sell at a loss.”

In addition, he said: “Eircom is ultimately providing the wholesale broadband element to O2 and others and, as such, is still getting the majority of the broadband revenue from the mobile operator.

“No other mobile operator in Ireland owns a fixed-line infrastructure-based network, unlike Eircom, which owns both the incumbent fixed-line network into all homes and businesses, and a mobile company, Meteor,” Quinn said.

croo

isn't the point that Eircom should be made offer be applicable for ALL mobiles networks not just meteor? But then I think all these same network packages should be applicable equally across all networks. I recently got a bill that included a €50 charge for a single call (yeah it was a long call) to a number I thought was the same network, but actually the other party had migrated networks but kept their old number so I was not calling the same network. I'm guessing this happens a lot and was probably the reason the mobile providers were so quick to enable number porting.

bealtine

croo wrote: »

was probably the reason the mobile providers were so quick to enable number porting.

Cynic :-)

Tom Young

Sorry for the late contribution ....

eircom throttled or ratcheted up their non-bundle rates in November last by 89% - So the truth in this statement from them is somewhat 'light'.

Imagine, not being on a bundle? ...

In case anything thinks this is not accurate, the same can be found on eircom's telecommunications scheme publication, which is on their website, and is approved by ComReg.

ComReg has found a bundle issue, its very close to two Competition Law infractions: 1. Tying Abuse and 2. Abuse of dominance.

If we had a Competition Commission that would act instead of deferring to ComReg it might put eircom under some pressure.

Tom

Sponge Bob

Tom Young wrote: »

If we had a Competition Commission that would act instead of deferring to ComReg it might put eircom under some pressure.

In Ireland , where most regulators have been willingly emasculated with Regulatory Capture the Competition Authority suffers from what I call " Cascaded Regulatory Capture" as it is itself captured by Captured Regulators .

This explains why it never moved against banks and telcos , ever.