Breakthrough in dispute between Eircom and Doyle on DSL system

Nuno · 14-03-2002 8:52am #1

I can't believe it. I thought this day would never arrive. Here is an article in the Irish Times

Breakthrough in dispute between Eircom and Doyle on DSL system
By Jamie Smyth

Irish consumers may be able to use new high-speed internet technologies from May following a major breakthrough in a six-month dispute between Eircom and the telecoms regulator.

The two parties are close to concluding a deal that would reduce by one-third the price Eircom would charge other operators to use its local telecoms network to supply these new services.

Eircom had planned to charge other operators €75 per month to enable them to supply internet services over its new digital subscriber line (DSL) network. But it is understood the two parties will now agree a fee closer to €50.

DSL technology, which is widely available throughout the US and Europe, enables consumers and businesses to connect to the internet up to 10 times faster than normal internet connections. It is considered a vital ingredient by industry and the Government to boost e-commerce and the State's competitiveness for investment.

The introduction of Eircom's high-speed internet product, i-stream, was blocked last year by the regulator, Ms Etain Doyle. She ruled Eircom's proposed wholesale charges were too high and would not enable competitors to compete in the provision of these new broadband services.

But at a US-Ireland e-Logistics forum held yesterday at Farmleigh House, Ms Doyle said the dispute should be concluded shortly. After the conference she told The Irish Times that "intensive discussions were ongoing" but she would not comment further on the issue. Eircom refused to comment when contacted.

Industry sources said talks between the parties were close to conclusion and negotiations were being conducted on a final wholesale price that would probably be close to €50, almost one-third less than the original figure of €75.

Both Eircom and the regulator have come under strong criticism from industry over the delay in the roll-out of DSL technologies in the Republic. The compromise deal on wholesale charges would enable Eircom to introduce its proposed i-stream DSL service before the end of May.

It is believed Eircom is anxious to agree a deal before its main competitor, Esat Telecom, begins trials of its own high-speed internet service in Limerick. Esat is engaged in a separate process with the telecoms regulator to enable it to begin testing DSL shortly.

Meanwhile, Ms Doyle told the e-Logistics forum yesterday she was concerned about the high cost of mobile origination and termination rates in the Republic. She said these charges, which mobile phone companies levy on consumers and other operators respectively, were too high. Ms Doyle is expected to move to reduce the price of mobile calls here shortly.

Figures released by the regulator's office yesterday show almost four out of five people in the Republic own a mobile phone. The survey found there are now 2.9 million mobile subscribers in the State.

c0y0te · 14-03-2002 10:38am

I snagged this from http://www.enn.ie this morning... looks like something if beginning to move. Interesting comment on the potential price too. Enjoy

c0y0te

________________________________________
Thursday, March 14 2002
by Matthew Clark

After a six-month dispute between the ODTR and Eircom, Irish consumers and businesses many soon have access to DSL technology.

On Wednesday, the telecommunications regulator, Etain Doyle, said that the conflict should be resolved shortly, though she declined to expand on the meaning of those comments. Doyle made the statement at a US-Ireland e-Logistics forum held at Farmleigh House in Dublin.

More evidence that the dispute may soon be resolved came from the Irish Times who cites unnamed industry sources on Thursday, claiming that the ODTR and Eircom were close to a resolution of their dispute.

At the heart of the conflict is the wholesale price Eircom wants to charge other telecommunications providers for DSL. Originally, Eircom planned to charge other operators EUR75 per month, per customer, to connect to its DSL network. But Doyle insisted that this figure was much too high and blocked Eircom from rolling out both its consumer and its wholesale DSL service.

Eircom has said that any other price would not be cost effective. But now it is thought that the company is willing to agree to a wholesale price of around EUR50 per month.

Pressure has been steadily mounting on Eircom and the regulator to conclude their dispute, since the first day it began. Furthermore Eircom now faces the prospect of competition from other telecoms who are moving ever closer to offering their own service without buying DSL from the former state owned telecom at a wholesale rate.

In November 2001, Esat said it had gained access to one of Eircom's exchanges in Limerick and planned to offer its own DSL service by April. At the time the company said that it had targeted 39 exchanges to be operational by the end of 2002, and was hoping to rollout DSL in Galway and Cork following its work in Limerick.

Meanwhile a company run by former Formus executives, European Access Providers, is planning to introduce wireless broadband Internet services in Dublin before April as well. EAP's technology is known as fixed wireless broadband, and it will provide the company with a way to offer broadband services much faster than dial-up, but without the need to lay cables to user's premises.

Along with the potential competition, the ODTR and Eircom have faced pressure from groups like ALTO, Ireland Off-Line and ICT Ireland. In fact, a wide range of organisations and companies throughout Ireland have expressed worries about the potential consequences of the Republic's lack of broadband and with an election looming in the next few months, the intensity of concern is increasing.

Even the European Commission has weighed in on the debate, saying one of its primary goals in the telecommunications sector in 2002 would be increased access to broadband for European consumers.

Nuno · 14-03-2002 12:07pm

If €50 is going to be the wholesale price that Eircom release their DSL product at. Can anyone tell me how this compares to the wholesale price of DSL in Britain when it was first released by BT. It would be interesting to see how competitive the price is.

I also presume that if Eircom do release their DSL product in MAY that it will be only available in the areas that ran the latest DSL trials.

Any thoughts?

Nuno

SkepticOne · 14-03-2002 12:50pm

I'm not sure what BT's wholesale started out at but look at this Point Topic report. Clearly the EUR 50 puts it in the higher end of the market so I would not imagine much ISP choice.

The retail price is unlikely to be affected since the main concern of the regulator is the so called "margin sqeeze". The two ways of dealing with this is to either raise the retail price (which they have done) or lower the wholesale price, or both.

Pepe LeFrits · 14-03-2002 12:58pm

Mmm, €50 a month would be pretty sweet. Although if there is still the 3Gb cap on it... hmm $:\$

Lemming · 14-03-2002 1:00pm

Originally posted by kaids
Mmm, ?50 a month would be pretty sweet. Although if there is still the 3Gb cap on it... hmm $:\$

That's 50 a month BEFORE the ISP/OLO's offer anything to us, so in reality we're looking at 75+ a month before VAT in usage terms.

And that's excluding any caps at 30+ euro a month per additional GB over 3gb that EirDump want to charge :rolleyes:

SkepticOne · 14-03-2002 1:00pm

No, the 50 Euro is the wholesale price. The retail price and the cap will be up to the ISP.

Nuno · 14-03-2002 1:08pm

Clearly the EUR 50 puts it in the higher end of the market so I would not imagine much ISP choice.

That was only to be expected from Eircom. We always knew that they would try and introduce it at as high a price as possible. BT where the same 2 years ago when they introduced DSL first (I may be wrong with 2 years as a figure), but look at how far they've come with their wholesale pricing now down to £20.

The fact that Eircom can now release a product marks the beginning of a new chapter in the IOFFL story. We've campaigned to get DSL introduced and we've got it. However, if Eircom thinks that we are going to go away, then they have another thing coming. This is only going to spure us on to campaign for DSL at a reasonable price.

Matfinn · 14-03-2002 1:12pm

As the wholesale price for DSL from Eircom could be €50, I would think that we would actually be paying alot more if you include the ISP's markup and VAT. Im thinking around €80 initially, and then in a few years the price would drop to around €60. I hate to be sceptical, but this doesnt look good

.

Matt

ando · 14-03-2002 1:36pm

what are you saying 'it doesnt look good'... its looking a hell of a lot better than ever before

Quorthon · 14-03-2002 1:39pm

Guys could someone who remembers correct me on this please??

I seem to remember that way back when Eircon announced their iStream adsl product (with the caps & all that bull****) that when they referred to pricing they also stated that aside from the dsl charge, you still had to pay line rental??? By my reckoning, therefore, if you add the ISP's/Eircon's profit margins, 21% VAT etc, you are not looking at anything less than €100 per month.

Also, I know dsl is an "always-on" type product from an internet point of view, but do you commonly have to pay call charges on top of that for voice calls???

Regs

Q

ando · 14-03-2002 1:41pm

Originally posted by Quorthon
Also, I know dsl is an "always-on" type product from an internet point of view, but do you commonly have to pay call charges on top of that for voice calls???

yep

dahamsta · 14-03-2002 2:29pm

You have to remember that you will still be able to use voice services on the DSL line. It's essentially just an upgrade.

adam

Quorthon · 14-03-2002 5:53pm

Originally posted by dahamsta
You have to remember that you will still be able to use voice services on the DSL line. It's essentially just an upgrade.

adam

So therefore Adam, I am probably correct in stating that Eircon will try to charge for general line rental on top of the dsl charge?

So some quick sums then - wholesale price = €50 +line rental €15 + estimate margin to service provider €25 = €90 + 21% vat = €108.90. Before call charges.

Now considering my current ISDN bill, including call charges, is generally between €70 and €100, but rarely exceeds this AND considering Eircon will probably charge people to remove their ISDN lines, PLUS the cost of installation......and....er.....well......I dont think I will be getting it.

Could someone clarify any of the above?

Q

Quorthon · 14-03-2002 6:03pm

Update - at the time of writing i.e. 5.00 pm 14/3/02, the following is the old information still on the Eircom website.

************************************************
eircom i-stream solo
There are a range of eircom i-stream products. The recommended residential product is eircom i-stream

For a single user, on a single computer

The product has both a USB port or ethernet option
Speeds are up to 512kbps downstream/128kbps upstream
Connection fee is €151.25 inc. VAT
Monthly fee is €133.10 inc. VAT
Additional equipment required: ADSL USB modem €175.45 inc. VAT or
ADSL Ethernet modem €242
For eircom i-stream the monthly download allowance is 3 GB.**

**There is an additional charge of 3.6c incl VAT per MB for material downloaded over and above the stated monthly download allowance.
**************************************************************

Now I presume the monthly fee will come down to a more reasonable level, but what will they do to the connection fee and price of the modems???

I think that the battle to get broadband in Ireland has been won, but the war for AFFORDABLE broadband has only just begun.

Q

SkepticOne · 14-03-2002 6:17pm

Originally posted by Quorthon

So therefore Adam, I am probably correct in stating that Eircon will try to charge for general line rental on top of the dsl charge?

So some quick sums then - wholesale price = €50 +line rental €15 + estimate margin to service provider €25 = €90 + 21% vat = €108.90. Before call charges.

Could someone clarify any of the above?

Q

Well, personally I would not include standard line rental in the equation as you have to pay that for all internet connections over Eircom lines. It's not generally included in price comparisons. I still expect the price to be about £90/month in old money. It will still be very much a home product at a business price.

It's worth remembering that all this is coming from "industry sources" and none of it is as yet confirmed. It could still be several weeks yet.

I would tend to wait until competing ISPs are in the market before signing a years contract. Although the retail price may be much the same (due to the still high wholesale price), I don't believe the download cap can survice in a competitive market.

rymus · 14-03-2002 8:05pm

Originally posted by Nuno
Irish consumers may be able to use new high-speed internet technologies from May following a major breakthrough in a six-month dispute between Eircom and the telecoms regulator.

The two parties are close to concluding a deal...

...Ms Doyle said the dispute should be concluded shortly.

Seen this type of thing before... being 'close' to a deal results in another long court case or argument between all concerned parties... The day I have to order a DSL router for my brand spankin new xDSL line will be my day to celebrate

LoGiE · 14-03-2002 8:43pm

The day I have to order a DSL router for my brand spankin new xDSL line will be my day to celebrate

Completely agree with you rymus. Fact is though if the 3Gb cap remain's ,which is a load of rubbish, ADSL at €100 is criminally expensive when compared to the rest of Europe...

E-Hub · 14-03-2002 9:04pm

Ive waited a long long time for this, nice to see its finaly here, maybe now i can get that decent connection i was allways ranting about

ando · 14-03-2002 9:07pm

jesus ppl, you cant honestly expect adsl to be offered here for 30euro's a month when its just being launched ? First off, we're talking about eircom here, and second, It 'is' a new technology for ireland and will be priced accordinaly

keithwhir · 14-03-2002 9:20pm

we all expected to pay a bit more for adsl in ireland due tou the small population and wide area that needs to de covered . oh does any body know whats the story with DSL in GALWAY ?

PiE · 14-03-2002 10:02pm

Yes it's good that its finally "close" to being released, but ~€75 (€150 bi-monthly remember) is still too expensive for most home users.

Home takeup will still be low.

gurramok · 14-03-2002 10:21pm

exactly, circa €75 is a start though, a bit pricey for home user.
Also reduce those ludricrous connection fees/modem prices !
Remember its all still speculation on final release price, sounds like it will be double the price what BT will introduce up north !!

kamobe · 15-03-2002 12:20am

Originally posted by keithwhir
we all expected to pay a bit more for adsl in ireland due tou the small population...

Havent Iceland dsl? And they've had it for years aswell.....
Also have unlimited dial-up too......

I cant remember the exact prices - but i *think* they were close to £30 (sterling) a month.....

Their population is 1/4 that of Dublin's.....

spockety · 15-03-2002 12:29am

"jesus ppl, you cant honestly expect adsl to be offered here for 30euro's a month when its just being launched ? First off, we're talking about eircom here, and second, It 'is' a new technology for ireland and will be priced accordinaly"

Umm, I have a cable modem from NTL, that's fairly new technology for Ireland, and it's costing me 25 Euro's a month.
Also, you can bet your bottom dollar that the money NTL spent on upgrading their network is a helluva lot less than what it would cost Eircom to kit out their network for ADSL..

gandalf · 15-03-2002 12:36am

Well the flipside to that coin is that Eircom are making small businesses, especially internet dependant ones uncompetitive compared to nearly all other countries in Europe.

Someone posted here a while ago a prime example. He/she works on the net and exchanges alot of information with partners in the US, they can send a 5MB file in seconds but it takes him ages on his outdated 56k line for which he is paying a fortune.

Everyone understands that Eircom are a private company trying to make a profit, but no company should be able to affect the competitiveness of a whole country as they are, and the government is mainly to blame for thsi situation.

Gandalf.

Jorinn · 15-03-2002 12:57am

Originally posted by keithwhir
we all expected to pay a bit more for adsl in ireland due tou the small population and wide area that needs to de covered . oh does any body know whats the story with DSL in GALWAY ?

That's misleading, DSL cannot be offered because of limits on the technology after a certain distance from the exchange, therefore it will only be avileable to mainly urban areas anyway, saying it will be expensive because of low population is merely an excuse. The US has 28 people per km squared whereas Ireland has 55 and we all know that there is a far high percentage of broadband internet users in the US.

Typedef · 15-03-2002 1:50am

Originally posted by ando
jesus ppl, you cant honestly expect adsl to be offered here for 30euro's a month when its just being launched ? First off, we're talking about eircom here, and second, It 'is' a new technology for ireland and will be priced accordinaly

Funnily enough, I was going to shout and winge and moan until I and people of like minded disposition could get the price as low as possible, 30 E sounds great, free sounds even better, I have no burning desire to give eircom my money so yes, stick it to em, why? I believe in giving as good as I get... now eircom were quite prepaired to charge near three times the 'wholesale' price to the end user for a capped service....... so in exactly which set of circumstances should I feel remorse in attempting to return the complement?
Exactly, zero, I feel no sympathy for eircon, the lot of them could spontaneously combust tomorrow and it wouldn't cost me a thought as I'm sure their pricing structure didn't cost them a thought either.

Why is the wholesale price so high? Because the same politicians that hobbled the telecoms bill, you know the ones who go truffel hunting with their pet pigs or fox hunting are the same politicians who sit on the governing board of eircom and are the same politicains that have allowed such comparitively expensive dsl.

Like some obviously intellegent person on this thread has said.... the day I get a dsl modem connected to my linux server I will believe it 'maybe'.

Stonemason · 15-03-2002 2:09am

Firstly id say that eircom are quite happy with the €50 wholesale price because i believe they were probably thought it would drop as low as €30 they new full well that haggling with the odtr would be a push over as they have no powers.

The sad thing is this could well give eircom the told you so factor they need if it is going to cost €100+ a month the take up by home users will only reinforce their no demand argument. Why do i get the feeling that eircom will suddenly drop their price for ADSL to €60ish (dependant on how greedy they are feeling)think of it €50 is the what everyone else has to pay just to access their lines add to this their existing line rentals and slap a 3gb limit on the service and they will corner the market. I also wouldn’t be surprised if eircom has been using this argument(stalling tactics) to upgrade allot more exchanges that its letting on.

Think on you know they are going to charge a fortune just for the needed equipment and installation looking into my crystal ball i see that home user will probably "HAVE" to by the equipment from eircom though they could find most of it allot cheaper else where.

Stone

Tis not time to sign with releif there are still allot of battles left

yellum · 15-03-2002 12:07pm

Originally posted by Stonemason
and slap a 3gb limit on the service and they will corner the market.

They already have it cornered and controlled and stopped.

neverhappen · 15-03-2002 12:59pm

Firstly id say that eircom are quite happy with the €50 wholesale price because i believe they were probably thought it would drop as low as €30 they new full well that haggling with the odtr would be a push over as they have no powers.

I agree. I think they'll be quite happy with 50.

I was on an earlier Eircom DSL trial and attended one of their one-way-mirrror "discussion" groups. The girl with the clipboard mouthed their question... (and I paraphrase here) "What about pricing - would you pay IEP 50 for this service ?".

I reckon that they had IEP 50 penciled in as their "residential" price, (introduced, of course, only after they have wrung the "bizness solution" market for all its worth), and if they had IEP 50 as their retail price, their "true" cost-based wholesale price is probably less that half of that.

Breakthrough in dispute between Eircom and Doyle on DSL system

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