Bitstream upgrade ‘distracts’ from LLU crisis

16 Mar 2005

Both the Commission for Communications Regulation (ComReg) and Esat BT have told they fear Eircom’s decision to upgrade its bitstream product will distract attention away from the core issue of local loop unbundling (LLU).

On Monday, Eircom revealed plans to transform the speed of broadband services currently available in Ireland by increasing the entry level or standard speed of its bitstream service from 512Kbps to 1MB for all wholesale and retail customers by 8 April. As well as this the company said that speeds for higher specification residential and business customers will increase to between 2MB and 4MB, which it said would push Ireland higher up the European league tables for entry level or standard broadband.

Bitstream access gives alternative providers less exposure to investment risk but conversely also less control over the DSL service portfolio and limits the potential to offer next-generation telecoms services such as voice over internet protocol and other bundled applications likely to define the future of telecoms. On the other hand, LLU and the automation of the process, which is currently the subject of a High Court case between Eircom and ComReg scheduled for 13 April, would free up telcos to provide bundled services.

According to Esat BT commercial director Peter Evans, the move is good news for other operators in the sense that they can offer higher-specification products to customers but at the same time operators are struggling to profit from a tiny margin.

“We are afraid that this might stymie or distract from the LLU issue. Although wholesale prices are finally approaching the European average (a year ago they were four times the European average) it is better late than never. However, LLU is still core to delivery of new services because you will need control of the network right down to the customer. We have invested in LLU and are committed to this strategy. Bitstream is only a stopgap to win customers and get them on our network but we cannot offer future, compelling services until this LLU impasse is resolved.”

Evans argued that because the current LLU process is manual rather than automated sometimes getting a customer ported to a new line can take up to six weeks. He illustrated the dangers facing new operators such as Smart Telecom by describing Esat BT’s present situation; out of 40 exchanges unbundled (theoretically giving the company access to more than 400,000 customers) the company is only signing up 50 to 100 customers a month and so far has a total of 2,500 unbundled customers.

“By comparison we have 30,000 broadband customers through bitstream wholesale DSL. That, however, is an automated service.”

Consumer lobby group IrelandOffline also shared Evans’ view that the bitstream development could distract from the LLU issue. Spokesman Aidan Whyte stated earlier this week: “Eircom recently appealed a ComReg decision to the High Court in an attempt to further disrupt and delay true competition via LLU. It is no coincidence that Eircom has produced these speed increases within weeks of Smart Telecom announcing its forthcoming services that operate over LLU. This is an obvious example of how Eircom will use every trick in the book to try to sustain its dominant position in the broadband sector. Now more than ever ComReg needs to make sure that competition is possible and sustainable in the sector.”

John Doherty, one of ComReg’s commissioners told, inter-platform competition is vital to the deployment of future telecom services in Ireland. “The future of the fixed-line telecoms market in Ireland is bundled offerings, including line rental, data and voice all-in-one package. We need to resolve the LLU issue in order to allow alternative operators an opportunity to innovate and provide services at a set price.

“While bitstream is important, the overall market would benefit from other companies being able to offer other services on top of broadband and that requires fully automated LLU in order to ensure mass migrations of customers and rapid number porting. It’s not good enough for businesses, for example, to make do with a temporary phone number while they wait for their old number to be ported.”

Doherty argued Eircom and the other operators need to have an automated system that works quickly. “It’s not rocket science and we are determined to have such a system in place. While we are working within the confines of the law to make this happen, there is an urgent need to resolve this issue.”

On the question of the length of time it takes to port customers’ number over LLU, Doherty said the process can take anything between one week and six weeks. “It’s not practical for consumers to accept that trade-off.”

He continued: “The functionality for an automated LLU system needs to be put in place and we will go to the High Court and are determined to make it work.

“Broadband in Ireland can’t simply be bitstream only. We need to provide the facilities and the mechanism for other companies to come into the marketplace, use the metropolitan area networks being built by the Government and provide real competition in the marketplace.

“The limitations of bitstream DSL are obvious to alternative operators in the Irish marketplace. In the UK, alternative telcos account for 60pc of bitstream usage, whereas in Ireland the local alternative operators account for 25pc of bitstream access.

“We need real competition and believe that LLU can provide that. Bitstream is not fit for the purpose of a modern telecommunications network in Ireland, either from a business or a consumer perspective,” Doherty concluded.

By John Kennedy