Fact-checking Ireland Offline

Posted on March 29, 2010, under general.

One of the saddest things about Ireland and technology is the degree to which the incumbent telco, Eircom, has been permitted to dominate and skew the market. The privatisation of Eircom was very very badly designed, effectively creating a monopoly for important national infrastructure. There have been multiple legal cases between Eircom and the Regulator, and many many complaints from consumers and competitors, but over the years little has happened.

Sadder still, and not unrelated, is that the most prominent activist group on this issue; Ireland Offline, have consistently been one of the most ineffective, maladministered bunch of ill-informed whinge-baggers going. Despite media prominence, many many column inches, a strong membership, public meetings, and more, I can’t think of a single achievement Ireland Offline could point to as a success. Some of their goals may have been achieved over the years, but only after geological delay and through coincidence.

On the contrary, I can think of many many falsehoods, myths and bizarre theories the group has promoted. My favourite being the simple falsehood that the majority of schools in Ireland have satellite broadband connectivity. But the latest effort takes the prize.

In an anonymous, unattributed blog-post with no contact details; http://irelandoffline.org/2010/03/eircom-and-next-generation-broadband/, Ireland Offline are making some very strange claims.

eircom today have announced their “Next Generation Broadband” promising speeds of up to 8MB to all subscribers, they claim to have also finally addressed the contention issue (which they call congestion). What is not in the headlines is the subtle but important change from a speed based model to a usage based model of charging.

In reality, there has always been a usage-based model of charging. In fact this is why Ireland Offline was founded, when Esat decided to place caps on their “no limits” service. Also in reality – the real costs of operating a network are aligned with usage and are not fixed. Anyone with even a modicum of familiarity about how networks and economics work can realise that the only long-term sustainable business models for Internet consumption are going to be usage-based.

The only alternative would be for the light users to effectively subsidise heavier ones. Does that really make sense? Is that equitable? Is there really a solid case for internet socialism?

Complaints about the pricing are justified, but the model? This kind of demand is very alienating, and in place-of such childishness, it would be much better to see a concerted economic argument for better broadband. What is the lack of good broadband doing for business, and so on.

The only thing “Next Generation about this product is the charging policy. This is a 200% increase on the average user’s bill for those who can least afford it. This product is only Dublin based for the moment.

Nowhere can I find any evidence of this 200% increase. My bill would decrease, I don’t know if I’m an average user or not, but I’d have thought I am.

This is yet another attack on the hard pressed telecommunications consumers of Ireland. Not only do they have to endure the highest line-rental on the planet they now have to endure a €2 charge for each Gigabyte they go over their paltry caps. For instance the “Broadband Basic” has a minuscule 10GB cap barely enough for the average “tech savy” family.

In reality this package will cost €50 for all but the lightest users. That’s €50 + line rental making the total €75.36 per month. This is hardly a giant leap forward it’s more like a gigantic leap into the dark past and into your wallet.

This is just false. Firstly, the cap for the Broadband basic (also called Broadband regular) package is 30GB, and line-rental is included. At least according to Eircom. Hell, it almost makes me feel good about giving Eircom my business.

In order to incur a € 76 bill, you’d actually have to use at least 43 GB. That’s not light usage. I’ve heard that there’s a ceiling to the charges too, at 50GB which means that if you use 80GB or more, you have a total bill of € 101, but I can’t find any documentation supporting this. I’m guessing Eircom continue to reserve the right to kick off persistent ultra-heavy users, but still ; even 43GB is quite a lot of bytes ; and about 35 hours of HD streaming video.

Now Eircom’s product launch is not without its faults. It’s still pretty expensive, by international standards, and in my opinion their statement that “With Next Generation Broadband (NGB) you will not be sharing your broadband connection with other Internet users.” is simply false ; upstream congestion can and will occur. The fundamental competitiveness problems in the market are not being fixed, and this will serve as a distraction.

But forget all of that, the biggest problem with the product is that it is only available in Dublin. Gee, that sounds like that kind of thing that a lobby group should be leading with. It’s almost like it’s exactly the kind of complaint that many many rural politicians would get onboard about. Instead it’s more of a byline to kooky economics and mistaken information.

Ireland Offline; seriously? Is this what it means to “be a source of accurate and impartial information on relevant technologies“?. Come on.

4 Replies to "Fact-checking Ireland Offline"

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Paul  on March 30, 2010

The only alternative would be for the light users to effectively subsidise heavier ones. Does that really make sense? Is that equitable? Is there really a solid case for internet socialism?

Well, duh, yes. If customers prefer paying flat fee to not, then that’s what ISPs should provide. That’s hardly socialism.

Sorry, and with all due respect, but your post goes a bit off the rails on the “defence of the cap” post. Just as a world where ISPs only offer flat-fee is bad for light internet users, so a world where there are only cap + fairly extortionate overuse fees is bad for all the non-light users.

An enterprise setup (or v network-techy home user) might have the resources be able to manage their usage to stay within a cap, but 99.99% of end-users do not (that statistic is out of my ass, but I’m pretty sure it’s accurate to at least 2 significant digits). Given that ISPs /do/ (or should) have the expertise to apply averaging to keep users within caps, and given that many users prefer the security of flat-fee (not unlimited usage per se), ISPs should be doing this.

That is to say, ISPs should be offering a variety of products, at *fixed* monthly fees, that offer customers different levels of access (in terms of usage limits). That’s would happen in a competitive market. As you point out though, Ireland does not have a competitive ISP market.

Given the lack of competition and hence the poor “vote with your wallet” options, I think people are quite entitled to whinge about over-use extortion.

10 hours/week of very crap quality 30KiB/s Youtube == 4GB. 10 hours / week worth of typical def TV == 16GB. That’s well within what even a restrained young adult might watch. So in a household with just one person like that, you’re already 2/3 of the way through the cap.

PS: your blog could do with a preview mode.

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colmmacc  on March 30, 2010

Pricing is never about what customers prefer, it’s about what the market will bear. For any given product or service, I can guarantee that the vast majority of customers would prefer that it be entirely free.

If ISPs were to charge for the average, then necessarily the majority of customers would be overpaying. This just doesn’t make sense to me, it seems like the kind of thing we should discourage. Most other utilities are billed based on usage.

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Paul  on March 31, 2010

Yes, what the market will bear is implicit in my post. You don’t know what a market will bear without competition.

While I was writing it I had in mind the difference between the UK and Ireland. UK has more competition and guess what pricing/usage plans ISPs in the UK have?

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Paul  on March 31, 2010

Well, we know what it bears without competition, clearly. But that’s obviously not what you’d want to compare to – given you’re complaining about lack of competition.

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