ODTR Meeting Report: 9th of April 2002

SkepticOne

Meeting with ODTR - 9th of April 2002

Attendance

IrelandOffline: David Long, Fergus McDonald, Michael Megan

ODTR: John Doherty (Head of Market Operations), Paul Conway (Head of Access and Interconnect), Aileen Canning (Manager, Market Operations)

EU mandating of sub-loop unbundling

We began by commenting on the recent sub-loop unbundling issues raised by the EU. We said that, from our point of view, sub-loop unbundling seemed like a good thing because some time in the future, a company may wish to offer VDSL type services. We underlined its importance in relation to a possible tie in with the Government's fibre rings project since that project does not fully address the 'last mile' issue.

It was explained to us that these sub-loops were available under LLU regulation but because no OLO expressed interest at this level, priority was given to exchange level unbundling in developing a reference offer.

In fact, the OLOs actually stated that they would prefer for the ODTR to provide support in implementation issues rather than by developing products with lower priority. We were told, in addition, there are technical problems with sub-loop access in Ireland.

Nevertheless, the ODTR and eircom will be working together to have a reference offer in place within the timeframe set down by the EU.

Digital Television

Our understanding of the license is that the operator of the license will be allowed to allocate up to 20% of their allocation to Internet provision services. The problem we saw was that this quota had to be split amongst the six multiplexes available under the license, i.e., up to 20% of each multiplex could be allowed for Internet use. Under the license, the flexibility was not there to for the operator to allocate a single multiplex for Internet which would allow the multiplex to be operated on a cellular basis. In our view, the license requirements forced the operator to operate the data component in an inefficient manner.

The ODTR felt that questions arose relating to whether a company providing both Internet and digital television would then be a telco and not just a digital television operator, in which case a different licensing regime would apply. The point was made that if an digital television operator was to provide Internet services, these Internet services may be hard to differentiate between those of a telecommunications company. Potentially, once you have an IP network, telco-like services are possible. This would mean that, in order to create a level playing field among telcos, the digital TV provider would also need to be a licensed telco operator.

We felt that there would be more competition in the market if companies were not limited to delivering specific types of services. Whatever licensing difficulties involved in this should be resolved.

We were told that a briefing note had been written which explains this in more detail. This note will be sent to us. Work on "technology neutral" legislation is being worked and is likely to appear in July 2003.

Focus Groups

Some time ago at our first meeting with the ODTR, IrelandOffline had asked for representation on the focus groups run by the ODTR which had been used in some of the consultation processes to date. We were told that the groups were closed off at that time and that we could not join them. We have subsequently learned that some of these focus groups were no longer operational and have not been consulted for several months.

The ODTR said that they were looking into creating new frameworks for these focus groups. One problem was that people were participating with different levels of knowledge and that it was difficult gathering useful feedback from this group. The ODTR is considering splitting the groups into different product areas, for example, a broadband group. The question then arises as to whether they appoint broadband experts or those with little internet background. It was suggested by the ODTR that IrelandOffline make some contributions on the reorganization of these groups.

Bitstream ADSL

We expressed concern that, given eircom's current monopoly over local-loop wholesale services, Eircom may wish to charge high wholesale prices for bitstream ADSL. We also mentioned that we felt that Eircom was aiming for a "business niche" in it's pricing. This would mean that they were limiting the volume of their sales and therefore economies of scale would not be achieved.

We were assured that Eircom would have to justify their wholesale prices on the basis of cost orientation and ensure that a 'margin squeeze' did not occur. The fact that eircom's proposed pricing did not comply with both these principles is why the October launch was delayed. The ODTR informed the meeting that discussions are progressing with eircom with regard to the launch of the service and both sides are hopeful of a early resolution.

FRIACO

The legislative position regarding the mandating of a FRIACO style offering by Eircom was examined, in light of such a product being recently made available in a number of other EU countries. We were concerned that the inability of the regulator to direct a FRIACO offering to be introduced was based on the determination that FRIACO was a form of 'special network access' (SNA), rather than a type of 'interconnect'. However, it appears that FRIACO could in fact be seen as a form of interconnect also. Given that it could therefore be covered under interconnect legislation, we asked whether the regulator had more extensive powers to mandate the product in that case. We particularly noted article 7.3 of the EU interconnect directive 97/33/EU which had been cited by the Italian regulator in their recent FRIACO directive.

The ODTR said that even under such legislation, they still required an operator to request the service before they could act. The interconnect legislation is generally based on the assumption that the regulator acts in response to demands from telecoms operators, and does not empower them to mandate services preemptively in the absence of this.

We queried the meaning of 'market need' within the legislation, but it appears that this again effectively refers to the need or demands of telecoms operators, not the end user.

We also put forward the argument that the current practice of charging ISPs for their wholesale interconnect of Internet calls on a per-minute basis was not cost orientated, and that the regulator could therefore direct Eircom to modify their RIO to provide a capacity-based (FRIACO) product instead.

Although there was some sympathy for this case, the ODTR pointed out that they do ensure wholesale product offerings are priced according to cost, and moreover must be comparable to the costs of an efficient operator, but that in the absence of a FRIACO style product existing, there was nothing for them to regulate.

The ODTR, while fully aware of the advantages of a flat-rate Internet product, pointed out that very little demand-profiling exists to support the case, and that they believe that eircom have still to date received no requests from any of the 28 licensed telecommunications operators with regard to providing such a service. Regardless of legislative changes or their powers in this matter, they pointed out that there is still no incentive for them to act unless an operator at least first demonstrates a desire to address the flat-rate market and approach eircom to ask for the service. The ODTR suggested that Ireland Offline lobby the operators should they wish such a service to be introduced.

Meh

Originally posted by SkepticOne
they pointed out that there is still no incentive for them to act unless an operator at least first demonstrates a desire to address the flat-rate market and approach eircom to ask for the service. The ODTR suggested that Ireland Offline lobby the operators should they wish such a service to be introduced.

Very interesting. I wonder why Esat haven't made a request for this service, seeing the problems they've had with the NoLimits service...

longword

Much obliged gentlemen for keeping the flag flying for us in so professional a manner.

Stonemason

How long as this someone has to ask us first, part been in place. It does seem funny that esat had flatrate up and running then folded without ever asking the ODTR to do something about the high prices they had to pay (presumably)ive been laboring under the impression that SNL was virtually scrapped because it was financially impractical due to Eircoms high pricing.



Stone

dahamsta

It's pretty simple really Stonemason:

- Esat says that the ODTR should mandate a wholesale flat-rate product.

- The ODTR says it cannot mandate a flat-rate product.

- Esat says they should.

- The ODTR says they can't.

- Esat: Should.

- ODTR: Can't.

I'm firmly of the belief that they're both talking out their butts. I think the ODTR /could/ mandate a product if they put their mind to it (reactive, not proactive), and I think that Esat know damn well that all they have to do is request a product and complain.

It's rubbish all round. The ODTR will be annoyed at me if they read this, but that's the way I see it. I believe that the ODTR isn't /fighting/ for power hard enough, and it's not creating competition in the marketplace, which is part of it's job. And Esat can bite me too.

adam