LLU announcement – too little too late

LLU announcement “too little too late”

IrelandOffline today welcomed the European Commission’s approval for a price reduction of 25% in the prices eircom can charge for LLU (local loop unbundling).

IrelandOffline also agree that “Broadband competition in Ireland is currently being held up by the high access prices Eircom charges” as mentioned by EU Telecoms Commissioner Viviane Reding.

Commenting on the announcement Ireland Offlline spokesperson Eamonn Wallace said ” The LLU process is now TEN whole years under (in)active consideration in Ireland.[1]

The first consultation on LLU in Ireland was started 10 years ago”[2]

This announcement may be too late as LLU is no longer relevant, the world has moved on and more important issues like SLU[3] are much more pressing now said Wallace.

EU Competition Commissioner Neelie Kroes said the moves will mean “alternative operators have to pay much less for access to eircom’s broadband network, enabling them to make more attractive retail offers”.
IrelandOffline see this as an unlikely outcome; as price cuts are simply not enough to create the climate for “more attractive retail offers”. The beleaguered DSL (digital subsriber line) operators are not profitable and have built up large debts from competing with the incumbent, eircom. Any reduction for consumers will be minimal.

Finally, Comreg seem to have realised that high rental costs for LLU do not lead to more competition and in fact, lead to stagnation in the market. The cherished ideologies of the regulatory regime in Ireland simply do not work in the way they are “supposed” to, said Wallace.
Why are these ideological dead-ends still continuing to be pursued? Comreg’s failed policies need to be reviewed in their entirety. The Financial Regulatory regime is currently under review, so too should all regulatory regimes like Comreg.

Even with these proposed reductions, Ireland’s LLU monthly prices will still be the 4th highest in the EU block. “This is hardly a stunning victory or even a mediocre victory It’s utter failure on the part of Comreg” said another spokesman for IrelandOffline.

Before LLU reduction.

ENDS

###

Other points:
Also to be considered in comparing costs and actual pricing of LLU is not just the Line Rental (in some countries this can be leased or purchased) but other costs and time:
* Cost of space in exchange for DSLAM or VOD servers
* Cost of access to exchange
* Cost of using existing backhaul to exchange belonging to incumbent.
* Cost of services (electricity etc)
* Cost of space on MDF
* Cost of fault clearance for LLU @ €117 per each item
* Time to agree access to MDF, provision of Rack Space, access to exchange
* Cost and response time to deal with line fault complaints
* Cost and time to change over customer
* Methods to provide a voice circuit (many LLU operators can only provide VOIP, thus the line may become incompatible with Phone Watch Alarms, Sky Digiboxes and Fax machines, etc).
* any mechanism to separate supply of POTS voice and DSL to different suppliers or POTS from the LLU DSL supplier.

Any or all of these can be barriers to LLU business or make it uncompetitive to supply.

ABOUT IRELANDOFFLINE
———————–
Campaigning For Affordable, Unmetered And Broadband Internet Access In Ireland IrelandOffline is a voluntary organisation consisting of home and business Internet users. Its brief is to campaign for the development of high-speed Internet access services and to promote innovation and competition in the Irish Internet marketplace.

For more information on the organisation, please visit the IrelandOffline website at http://www.irelandoffline.org or contact us at info@irelandoffline.org. For urgent media enquiries, contact spokesperson Eamonn Wallace at 086 250 6350.

[1]
In 1997 the EU adopted DIRECTIVE 97/33/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30 June 1997 on interconnection in Telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP) as further amended in the Voice Telephony Directive (98/10/EU). This became the LAW  in Ireland when  The Minister for Public Enterprise, Mary O’Rourke, TD, signed the Irish Regulations transposing EU Directive 98/10/EU into Irish law on Thursday 25th March 1999.
Ten whole years on almost nothing has happened. Other advanced knowledge economies have powered on with LLU . Britain and France notably .
Article 16 of these regulations is  the key legal framework that enabled the creation of the EU LLU market.
Note what Article 16 (4) says –
National regulatory authorities may intervene on their own initiative at any time, where justified, in order to ensure effective competition and/or interoperability of services and shall do so, if requested by either party, in order to set conditions which are non-discriminatory, fair and reasonable for both parties and offer the greatest benefit to all users.”

[2]

The then ODTR ( now Comreg )  neatly summarised Article 16 for us in this consultation . In their words, from 1999 –

In the meantime, EU legislation does not explicitly specify a regime for LLU. Irish legislation transposes EU legislation and similarly does not explicitly specify a framework for LLU.

However, in many EU member states, the provisions in EU legislation in relation to Special Network Access have been used to devise an appropriate framework for LLU.

The relevant provisions are set out in the Voice Telephony Directive (98/10/EU). The most relevant provisions of the Directive in relation to Special Network Access are as follows:

•Operators with Significant Market Power must deal with requests for access to their networks at network termination points other than those commonly provided(Special Network Access)

•The provision of such access must be at cost oriented rates and comply with the principle of non-discrimination

•The conclusion of agreements is a matter for negotiation between the parties in thefirst instance

•The National Regulatory Authority, (the Director of Telecommunications Regulation) may intervene and shall do so if requested by either party, to set terms and conditions for access and to ensure that agreements are implemented in the interests of users. “

Meaning that other EU countries had set about the creation of the LLU market as quickly as possible once allowed to do so.


[3] SLU
Sub-loop unbundling is the process by which a sub-section of part of the local loop is unbundled. In practice this often means the competitor placing a small street cabinet with a DSLAM, next to a local copper aggregation cabinet or serving area interface and using a `tie cable’ to connect to the last part of the local loop into customers’ homes. The short range brings superior bit-rate performance, compared to normal Local loop unbundling (LLU).

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