Eircom will 'wipe out' Irish telcos: ALTO
Network upgrade will 'increase digital divide'
Irish telcos have reacted angrily to Eircom's plan to upgrade its network infrastructure, with one industry group claiming it could eliminate competition.
Eircom has confirmed it intends to invest €60m on upgrading its central telecommunications network. The upgrade will bring increased bandwidth to 240 Eircom exchanges, opening up the possibility of data-heavy services such as internet television (IPTV). Greater bandwidth may also result in fewer delays for broadband customers when a large number of users are online.
However, Eircom's plans have gone down badly with members of the Alternative Operators in the Communications Market lobby group (ALTO). It claims the incumbent's design for a Next Generation Network (NGN) could effectively kill off other broadband companies.
"If Eircom is allowed to proceed with its planned approach to the introduction of NGNs without proper consultation, future competition in the Irish telecoms market will effectively be wiped out. Their proposal will serve only to further increase the 'digital divide' that already exists to the detriment of Ireland's consumers," ALTO said in a statement.
ALTO has called on ComReg to monitor Eircom's plans. "Any misguided support of Eircom's plans without such regulatory intervention may increase the digital divide and further reduce competition. This would be the wrong outcome for consumers."
Eircom's stance on the matter is that ALTO is fudging the issue: raising the spectre of consumers' being unable to access broadband from alternative operators, whereas Eircom claims upgrading its core infrastructure will benefit consumers and competitors.
"We don't see that anything we're doing is contentious," an Eircom spokesman said, who added that the telco's NGN plans were submitted to the Department of Communications and ComReg for feedback. "Increasing our network capacities to 1GB and 10GB will benefit other operators, consumers, big corporations looking for high speed connections and government in terms of spatial strategy."
ALTO doesn't see things the same way though, and is worried that its members' capital investment in Eircom exchanges will be nullified.
"To date, millions have been invested in telecoms exchanges nationwide and the future of these exchanges now hangs in the balance, as does the LLU network. ALTO members have very real concerns over the potential introduction of the planned development of the NGN which undermines and damages the considerable investment made by investors in this sector."
ALTO believes any change from existing technology to Eircom's planned IP technology requires a fundamental change in the interconnection arrangements between alternative operators and the incumbent.
Moreover, according to an ALTO spokesperson, among the proposals being considered by Eircom are plans to close up to 40 telephone exchanges in which other telcos have expensive equipment installed.
"We have never said we are going to close down exchanges," said an Eircom spokesman, who added that ALTO's argument was the same one it complained Eircom used in relation to Local Loop Unbundling.
A spokesperson for ALTO told ENN its members' investments in existing interconnection arrangements are written off over a seven-year period and that if Eircom opts to upgrade its network earlier than expected, ALTO members must be compensated because they will be left with "stranded assets".
In addition to voice interconnection equipment, ALTO members also have leased lines in Eircom's Partial Private Circuit nodes (PPCs). These nodes may also be impacted by the NGN programme as exchanges are closed down.
ALTO's complaints don't stop there. It is also concerned about access: the organisation said it appears Eircom is planning on using "fibre to the cabinet" and very high bit-rate (VDSL) technology in areas with high customer concentrations. These are the same locations that ALTO members are building Unbundled Local Loop (LLU) networks.
According to ALTO, these technologies will not only be exorbitantly expensive but will also strand ALTO members' infrastructure.
ALTO argues that the best approach is to emulate the Northern Ireland experience, where NGN upgrades do not strand LLU but instead beef up the existing network and deploy ADSL+ with bonded copper techniques where additional bit rates are needed.
For its part Eircom said the LLU process doesn't exist in Northern Ireland as it does in the Republic and the comparison is irrelevant.
According to ALTO's website, its members include Budget Telecom, BT, Cable & Wireles, Chorus, Colt Telecom, Magnet Networks, ESN Telecom, Meteor, NTL, Smart Telecom, TalkTalk and Verizon.
Copyright © 2007, ENN