Business Technology

Tuesday 12 December 2017

Adrian Weckler: Wrong call on our phone USO?

Of some 900 phone kiosks, over 600 see less than one minute’s use per day
Of some 900 phone kiosks, over 600 see less than one minute’s use per day
Adrian Weckler

Adrian Weckler

If you were drafting a law for mandatory universal telecoms access in Ireland, which of the three following communications formats would you apply it to?

(a) Broadband;
(b) Mobile;
(c) Landline phone calls.

Most people would probably choose (a) or (b). In Ireland, we prefer to apply it only to (c).

It’s a bizarre, archaic way of looking at our national responsibilities. How long will it continue?

Eir has been giving out about this for a few years. Little wonder: it is the one that has to foot the bill for the law. Under Irish telecoms law (through Comreg decisions), Eir has responsibility to pay for, and maintain, all the far-flung rural telephone lines in the country. If you build a house in a bog or up a mountain, Eir has to connect your house largely at its own cost (up to €7,000).

The company has been complaining about this being unfair. It says that the law has hit it for €56m over and above its ordinary costs over the last six years.

Ten years ago, one might have argued that this was just tough luck, that telephone landlines were critical pieces of communications infrastructure that keep rural areas in touch and it's a price that Eir should pay for the privilege of having possession of the rural phone network.

Today, it's getting harder to make that argument. Landlines are relied on less and less for calls anywhere in Ireland. General usage figures from Comreg show a terminal slide in their operation.

In some instances, the collapse is extreme. Of some 900 public telephone kiosks in Ireland (owned and operated by Eir), over 600 see less than one minute's use per day. That makes them archaic, redundant contraptions of the past, whose main function appears to be as a training ground for graffiti artists and vandals.

In the most remote spots of the country, it is mobile coverage that people want, not the facility to make a landline call.

So why do we still have a universal service obligation for wired-up telephone calls, but not for mobile services or broadband? And why should Eir continue to foot the bill for the legacy service?

On this front, Eir now wants a general 'USO fund' to be created into which rival operators such as BT, Vodafone and Sky would contribute annually to help meet the costs of the most remote rural connections.

Its logic in asking for such a fund is fairly straightforward. Eir says that while it has to pay for infrastructure to a remote rural home, the owner can then choose Vodafone or another rival for €30 per month.

Eir gets saddled with the cost of putting in the shiny new infrastructure while Vodafone gets the instant profit.

Not surprisingly, this 'USO fund' request has been met with raised eyebrows among rival operators.

It's not just that Eir has a history of discrepancies between how its wholesale wing treats its own retail operations over rival retail telecoms firms operating off its infrastructure.

Companies such as BT, Vodafone, Magnet, Sky and others argue that Eir continues to have a 'blessed' position in Irish telecoms. Its ownership of the biggest, most widespread bit of infrastructure in the country - which it inherited from the State - confers upon it responsibilities over and above other telecoms firms, they contend. They argue that this infrastructure gives Eir a headstart over all rivals and that this easily compensates for €5m to €10m per year in annual expenses accruing to Eir for having to maintain rural phone lines.

For its part, the telecoms regulator has been kicking the issue to touch for a number of years. In 2014, Comreg's chairman said that the watchdog was "open" to discussing a USO fund. But the issue doesn't appear to be any closer to a resolution. Instead, every two years Comreg declares that Eir remains the entity who must take responsibility by law for keeping the rural, remote lines going.

Comreg is not afraid to fine Eir, either. It levied a record €3m fine on the company recently over not meeting quality of service targets. Eir paid up.

So who is right?

Both Eir and its rivals have valid points in this debate.

Eir benefits far more than it suffers from its ownership of what was once a nationally-owned piece of infrastructure. It can't play the poor mouth too much.

On the other hand, it is surely absurd in 2017 that Irish law makes landline telephone calls (regardless of whether they can carry any broadband signal) obligatory around the country while far more relevant services, such as mobile and broadband, face no such requirement.

In the case of mobile phones, this is especially egregious. Few issues attract as much annoyance in rural parts of the country as poor mobile network coverage. Many would gladly swap their phone line for a decent mobile connection.

The Government knows this, which is why it has said it will consider making 100pc geographic coverage a requirement for the next round of mobile licences.

And then there is the National Broadband Plan. The Government's pledge to build out fibre-grade internet availability to every remote premises in the country will effectively create a universal service obligation for broadband.

When that happens, maintaining a USO for analogue telephone calls will seem even more ludicrous, especially if Eir doesn't win the tender for the NBP. Picture a scenario where Siro (the joint venture between the ESB and Vodafone) gets the contract to provide fibre to 540,000 of the most uneconomic rural premises while Eir is still required to run copper phone lines into the same homes. It's patently ridiculous.

Given that it's hard to see Comreg justifying such an eventuality, it looks like we may be in the last years of the current regime.

Sunday Indo Business

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