Seminar Q&A - Second Guessing

LegacyUser · 19-08-2001 11:19am #1

Hats off to the crew - I think we may not see the likes of such a gathering again for a long time..

With that in mind and to maximize the effectiveness of the Q&A, could we do a bit of exploring the possible answers to the questions in advance..

Is there any obvious contradiction between the responses to date from the minister, ODTR, Eircom and Esat?

If we go in heavy on the pricing for ADSL, and they say well "nothing launched yet, so can't comment on that.." .. then what? Could all the questions come down to just 'wait and see' answers..?

Is there any chance of any of the parties doing anything other than just stating their existing positions that we are already aware of? If so, how will that happen? Is there any such commitments/advances that we really want to see?

LegacyUser · 19-08-2001 1:46pm

One thing I think Eircom have side-stepped is the issue of ADSL pricing. During the meeting, Eircom said that pricing would be down to the ISPs. They left out the fact that the ISPs pricing would largely be dictated by Eircom's wholesale prices.

Eircom did say that whatever they charged Eircom.net they would have to charge other ISPs.

This does not address the issue at all. It has been used several times and a lot of the press seem to have been taken in by this statement.

It is important to remember that Eircom.net is a subsidiary of Eircom and so agreements between the two "separate" companies are meaningless. From Eircom head-office point of view, it makes little difference how the charges are structured.

What is important is the wholesale rate that Eircom is willing to supply genuinely separate ISPs.

So Eircom saying that whatever they charged themselves they would have to charge other ISPs has no meaning. If I charge myself £100 for a mars bar, I lose nothing since I am simply handing money from one hand to the other.

It is down to the ODTR to independently assess Eircom's wholesale rate based on that of an "efficient European operator" operating in a competitive environment.

These comments are prompted by rumors in the press that Eircom were going to charge themselves £100 per month for wholesale. I hope they lead to some probing questions at the meeting.

I realise that a strategy of IrelandOffline is to get the services introduced first and then allow prices to come down through competition, but by setting a high wholesale price, Eircom have the oportunity to stifle competition and raise the floor for any possible retail offering.

LegacyUser · 19-08-2001 3:28pm

Yup.. Eircom can effectively dictate what it costs to provide ADSL services, for the whole industry. A high price may be more suitable to them if they don't really want ADSL to 'take off'.

The problem is, whatever number they come up with, unless we know what it really costs, how can we contradict it? Is Ireland really a special case in terms of costs? Does the ODTR really know (or is even entitled to) what Eircom's costs actually are.

LegacyUser · 19-08-2001 4:07pm

Originally posted by Skeptic1:
One thing I think Eircom have side-stepped is the issue of ADSL pricing. During the meeting, Eircom said that pricing would be down to the ISPs.

They didn't really 'sidestep' it - they just stated that the prices were being submitted to ODTR and would be public soon thereafter.

They left out the fact that the ISPs pricing would largely be dictated by Eircom's wholesale prices.

As a rule of thumb, I would expect retail price to be wholesale price + 50-60%. For example, BT in the UK charges wholesale FRIACO at something like £9-£10 and ISP's charge £14-£15; I'm not sure about ADSL but I think it's similar formula

Eircom did say that whatever they charged Eircom.net they would have to charge other ISPs...It is important to remember that Eircom.net is a subsidiary of Eircom and so agreements between the two "separate" companies are meaningless

I think there is a little confusion here - Eircom can't have any specific agreement with Eircom.net - they must have a single wholesale rate that applies to all ISP's

It is down to the ODTR to independently assess Eircom's wholesale rate based on that of an "efficient European operator" operating in a competitive environment.

Exactly - as the ODTR did with LLU prices.

These comments are prompted by rumors in the press that Eircom were going to charge themselves £100 per month for wholesale.

Bear in mind that these are 'rumours' - we've done our own little bit of discreet checking on this and think that the Irish Times got this wrong.

I hope they lead to some probing questions at the meeting.

Someone needs to submit the right question(s)

I realise that a strategy of IrelandOffline is to get the services introduced first and then allow prices to come down through competition

This is not a defined strategy as such. All we have said so far is that the feedback from members is that cost is not the be-all and end-all - most users are prepared to pay higher than UK rates to get the services. Also, there has been a fairly broad consensus on this forum that we should not get *too* hung up on prices that are not yet announced.

Martin

LegacyUser · 19-08-2001 4:13pm

Originally posted by Fergus:
Does the ODTR really know (or is even entitled to) what Eircom's costs actually are.

I don't know exactly how this works but the onus is on Eircom to justify any proposed charge to the ODTR.

In the case of LLU, the ODTR didn't accept Eircom's justification of charges and imposed a lower one.

I think that prices is one area where ODTR has a lot of power and is not afraid to use them.

If anything, I would worry a little bit that ODTR goes too far on this and imposes a price that is too low to make it viable for Eircom. That BTW is a personal opinion and not necessarily an IOFFL one.

Martin

[This message has been edited by o_donnel_abu (edited 19-08-2001).]

LegacyUser · 19-08-2001 4:28pm

Originally posted by o_donnel_abu:
I don't know exactly how this works but the onus is on Eircom to justify any proposed charge to the ODTR.

I wish this process was a bit more out in the open. It also seems to be about the most inefficient and slow way of doing it. I mean, Eircom take forever to come up with an LLU price. ODTR decides it should be a lot less. Eircom have no choice but to stick to their guns and claim they can't operate at the ODTR price. Off to the courts. No service. Public none the wiser as to the truth of the matter. More delays.

Really hope this isn't going to happen again with the DSL bitstream unbundling.

LegacyUser · 19-08-2001 4:57pm

I assume there hasn't been anything heard back from the dept/odtr/esat since the meetings with them.. there was a number of issues they were looking into.

What happens if all the operators decide it's not worth it, and we're stuck with no broadband or flat rate? It seems that a lot of the responses from Eircom to date seem to point to a lack of commercial viability. How do you argue with this.

LegacyUser · 19-08-2001 5:22pm

Originally posted by Fergus:
I assume there hasn't been anything heard back from the dept/odtr/esat since the meetings with them.. there was a number of issues they were looking into.

Not really - maybe they're keeping it all for seminar

Martin

LegacyUser · 19-08-2001 5:50pm

Well I hope some advancement of the situation comes of it.. Hope it's not just a lot of deferring answers until after DSL launch, LLU court case, etc..

LegacyUser · 19-08-2001 6:01pm

I have serious problems with the idea that ISPs need to negiotiate with Eircom for something that is supposed to be supplied on the basis of cost.

What would have happened in the case of LLU if Eircom had priced access to it's exchanges even higher and all OLOs decided to call it a day?

LegacyUser · 19-08-2001 6:06pm

Originally posted by Skeptic1:
I have serious problems with the idea that ISPs need to negiotiate with Eircom for something that is supposed to be supplied on the basis of cost.

Surely the ODTR on behalf of the consumer is able to audit Eircom or whoever and determine the cost once and for all. Just picking an EU average figure is obviously open to criticism of not being relevant to Ireland.

LegacyUser · 19-08-2001 6:27pm

Originally posted by Fergus:
Surely the ODTR on behalf of the consumer is able to audit Eircom or whoever and determine the cost once and for all.

This is the case only after negotiations have broken down, as I understand it.

Just picking an EU average figure is obviously open to criticism of not being relevant to Ireland.

I don't think this is what happened. After Eircom's costs were assessed, it turned out that the price imposed on them happened to be within the European average.

LegacyUser · 19-08-2001 7:36pm

Will be interesting to see how Eircom can justify the figure they came up with then

LegacyUser · 19-08-2001 7:58pm

Just had a look at ODTR D/08. Right.. so, if eircom's LLU costs are European average, you wouldn't expect other costs to be wildly different... so is it reasonable to expect flat-rate internet services as prices similar to other EU countries?

LegacyUser · 19-08-2001 9:39pm

Originally posted by o_donnel_abu:
I don't know exactly how this works but the onus is on Eircom to justify any proposed charge to the ODTR.

In the case of LLU, the ODTR didn't accept Eircom's justification of charges and imposed a lower one.

They did accept the charges initially when LLU became a reality in Ireland on 31 December 2000 even though the charges were so high that most of the OLOs walked away.

I think that prices is one area where ODTR has a lot of power and is not afraid to use them.

If anything, I would worry a little bit that ODTR goes too far on this and imposes a price that is too low to make it viable for Eircom. That BTW is a personal opinion and not necessarily an IOFFL one.

LLU, for example, is disastrous for Eircom commercially. It involves allowing competitors access to Eircom's premises, lines and equipment so that the competitors can more effectively compete against Eircom and poach customers.

To adequately compensate Eircom for this intrusion would involve an amount of money far greater than even Eircom were asking. Without LLU, the OLOs would have to build functionally equivalent infrastructure at enormous cost.

However, luckily for us, it is not a matter of commercial viability. It is a matter of European law. There should be no arguing with Eircom about this. The LLU charges should be worked out using the techniques of cost accounting.

I believe the same points apply to bitstream. In order to work out what it would cost Eircom to provide wholesale ADSL, you could analyse, say Germany's ADSL product. Look at each of the steps in providing the service and then adjust for any factors specific to Ireland (e.g. cheaper labour costs). If Eircom decide to organise themselves differently so that the costs are higher then that should be their problem not ours.

Is this unfair? I don't think so. I am not singling out Eircom here specifically. No company should have total control over such a vast amount of former national infrastructure. LLU is about sharing an aspect of this infrastructure with others.

[This message has been edited by Skeptic1 (edited 19-08-2001).]

LegacyUser · 19-08-2001 10:44pm

It's almost pointless asking any questions of Eircom. Any change would seem to be bad news for them. To quote from the Eircom meeting:

"FRIACO could be introduced by the end of 2001, if two conditions are met: if it is a commercially viable business case for Eircom; and if the very significant operational and network capacity issues are resolved."

They also mentioned not developing a data network because of regulations forcing them to provide internet over the voice network. You would think the data network would be the way to address the capacity issue. I'd also like to know how (if) Eircom see FRIACO being commercially viable for them..

LegacyUser · 19-08-2001 11:28pm

Please don't take offence folks, but is it a good idea to air your questions here? Hasn't it been said that the "powers that be" keep a close eye on these boards? Im as keen as the next person to see these questions answered but isn't it a case of forewarned is forearmed??

~Z~

LegacyUser · 19-08-2001 11:45pm

Agh.. as Martin said we wash our laundry in public. I don't think there's any big secret anyway. And we're not trying to pull a fast one at this seminar.

Mind you, I was thinking earlier what it must be like to have to field questions at something like this. I guess if you really don't want to say anything much or drop any clangers, you can just weather the storm and play the clock.. You can't force people to say things they don't want to say. All I can think is that that in itself says something.

LegacyUser · 20-08-2001 12:31am

Originally posted by Fergus:
It's almost pointless asking any questions of Eircom. Any change would seem to be bad news for them. To quote from the Eircom meeting:

"FRIACO could be introduced by the end of 2001, if two conditions are met: if it is a commercially viable business case for Eircom; and if the very significant operational and network capacity issues are resolved."

They also mentioned not developing a data network because of regulations forcing them to provide internet over the voice network. You would think the data network would be the way to address the capacity issue. I'd also like to know how (if) Eircom see FRIACO being commercially viable for them..

I can't see any real reason why Eircom can't introduce FRIACO apart from sheer f****ing greed. They make tons of money in profit as it is and the reason they don't want to introduce FRIACO or even their own flat-rate service is because they know they will not make as much money as they currently do from other teleco's or from charging for each call.

This really ****es me off because, yes, they won't be making as much money as they do at the moment but they will still be taking in cash from the other teleco's and customers on a flat-rate service. This indicates that Eircom just don't give a damn about what the general public want and are only interested in doing anything they can to maximise their own profits. Have none of these companies ever heard of the sayings, "The customer is always right" or, "The customer comes first?" Obviously not.

Eircom, Esat, Chorus, ODTR, everyone, please, for once, show that you do actually care and respect the business of the average customer and provide us with what we want for once.

LegacyUser · 20-08-2001 12:41am

Originally posted by Fergus:
I don't think there's any big secret anyway. And we're not trying to pull a fast one at this seminar.

Exactly - we just want straight answers to questions. I don't think the general discussion is doing any harm - it shows how serious we users are and the issues that concern us - and the participants won't know the exact questions until they are asked at the seminar

I guess if you really don't want to say anything much or drop any clangers, you can just weather the storm and play the clock

There's been a slight change in the arrangements - I will now be chairing the Q&A session and believe me, I have a very low tolerance level for waffle

Martin

LegacyUser · 20-08-2001 9:33am

Originally posted by o_donnel_abu:

I will now be chairing the Q&A session and believe me, I have a very low tolerance level for waffle

Martin

Hehehe.. yeah, there's a lot to be said for Donegal folk

But seriously, the best thing about this is the way all the parties are on the one stage. I'll go away seriously depressed from this if they all appear to be singing from the one hymn-sheet (apart from you of course Martin).. that surely will prove there's something wrong.

LegacyUser · 20-08-2001 9:38am

Originally posted by aidan_dunne:
I can't see any real reason why Eircom can't introduce FRIACO apart from sheer f****ing greed

Well, as has been said, this isn't going to be a bash-Eircom session.

All I would ask if Eircom are not interested in catering to the Residential/SOHO DSL or flat-rate markets, that they would just call a spade a spade and say so, instead of all this "when conditions are met", "technical difficulties" stuff. I notice they are launching a bit 20m IP investment backed MPLS service in September too.. this further fuels my suspicion that they see ADSL as something worth selling to businesses only.

LegacyUser · 20-08-2001 9:48am

Originally posted by Fergus:

All I would ask if Eircom are not interested in catering to the Residential/SOHO DSL or flat-rate markets, that they would just call a spade a spade and say so, instead of all this "when conditions are met", "technical difficulties" stuff.

I agree. The emphasis should be on precicely what they are going to do and when. The "when" bit is very important. This applies to all the speakers at the seminar.

I notice they are launching a bit 20m IP investment backed MPLS service in September too.. this further fuels my suspicion that they see ADSL as something worth selling to businesses only.

I think this is because ESAT are planning on taking up LLU and are targeting mainly the business leased line customers.

LegacyUser · 20-08-2001 10:09am

If there is any chance, can we ask another important question to Eircom in the seminar ....

Can we ask them what DSL modem's they are going to use for their DSL service ?

I mean, if they use the basic DSL modem's, I CAN't GET DSL

If they use the advanced modem's they use in the UK (BT) then I probably will be able to get DSL ...... And from the area I live, there is a lot of people in the same boat as me.

LegacyUser · 20-08-2001 10:18am

Originally posted by Skeptic1:

I notice they are launching a bit 20m IP investment backed MPLS service in September too.. this further fuels my suspicion that they see ADSL as something worth selling to businesses only.
I think this is because ESAT are planning on taking up LLU and are targeting mainly the business leased line customers.

Hehe. I somehow don't think that DSL and MPLS switched IP networks compete in the same market space (for those who don't know the difference, DSL is usually costs about 5% as much as pure IP network access...)

I mean, if they use the basic DSL modem's, I CAN't GET DSL

I'm going to take a guess that you're out of luck Ando. What BT is doing is not just about the modems. RADSL requires an upgraded DSLAM as well, and thus appears to be a fairly different service to the ADSL service that Eircom is trialling.

I'd start phoning the cable companies myself, if I were you. Maybe you'll be able to get Chorus' Powernet when it launches.

[This message has been edited by hudson806 (edited 20-08-2001).]

[This message has been edited by hudson806 (edited 20-08-2001).]

LegacyUser · 20-08-2001 11:11am

Originally posted by hudson806:
Hehe. I somehow don't think that DSL and MPLS switched IP networks compete in the same market space (for those who don't know the difference, DSL is usually costs about 5% as much as pure IP network access...)

I heard that Esat were planning to offer some sort of SDSL service. Although my knowledge is limited, isn't it the case that services can be provided over SDSL that can compete in the leased line arena (at least the lower end)?

LegacyUser · 20-08-2001 11:48am

Originally posted by ando:
If there is any chance, can we ask another important question to Eircom in the seminar ....

Can we ask them what DSL modem's they are going to use for their DSL service ?

I mean, if they use the basic DSL modem's, I CAN't GET DSL

If they use the advanced modem's they use in the UK (BT) then I probably will be able to get DSL ...... And from the area I live, there is a lot of people in the same boat as me.

pariel - USB Adaptor

LegacyUser · 20-08-2001 11:51am

Originally posted by Skeptic1:
I heard that Esat were planning to offer some sort of SDSL service. Although my knowledge is limited, isn't it the case that services can be provided over SDSL that can compete in the leased line arena (at least the lower end)?

Yep. In fact, so can ADSL services - the technologies are basically identical apart from one or two minor tweaks to boost the upstream capacity.

The point, though, is that MPLS switched networks are most definitely a 'premium' product - cutting edge, very expensive to build and operate, and hence expensive to access. If you are paying that much to access the network, you might as well do it over something a little more ambitious than a DSL hookup..

pariel - USB Adaptor

His concern is that he lives too far away from the exchange, not that he doesn't have a USB port... Besides, I'm not sure that a 'pariel' - USB adapter would do the trick - as pariel ports don't provide power (I think)

[This message has been edited by hudson806 (edited 20-08-2001).]

LegacyUser · 20-08-2001 12:15pm

Originally posted by hudson806:
The point, though, is that MPLS switched networks are most definitely a 'premium' product - cutting edge, very expensive to build and operate, and hence expensive to access.

This page describes MPLS being operated over Time Warner's "Road Runner" cable modem service.

LegacyUser · 20-08-2001 12:20pm

Originally posted by hudson806:
Yep. In fact, so can ADSL services - the technologies are basically identical apart from one or two minor tweaks to boost the upstream capacity.

The point, though, is that MPLS switched networks are most definitely a 'premium' product - cutting edge, very expensive to build and operate, and hence expensive to access. If you are paying that much to access the network, you might as well do it over something a little more ambitious than a DSL hookup..
B]

Well I hope so.. but can we rule out DSL being used as a way of hooking into this? Anyway.. it's just the similar launch date, and the fact that Eircom are able to find 20 mil to invest in new business service offerings, but nothing after years of apparent demand from the residential sector..

LegacyUser · 20-08-2001 12:24pm

This page describes MPLS being operated over Time Warner's "Road Runner" cable modem service.

True enough, but I don't think that Eircom is spending 20m Euro on a project like that...

Damn, it would be cool though.

Seminar Q&A - Second Guessing

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