The Straight Jacket.

Dermot,

we've censored Smart Telecom for calling Eircom's line rental increase "insane", now they try to get smart with us:

To
John Doherty
ComReg

John,

ComReg's censoring of my Smart Telecom for claiming "Eircom’s fixed line price hike is insane", apart from making me laugh, made me think again about the issue.

1. We were wrong. Eircom's line rental price hike is not insane. Eircom are a UK registered company which acts without a shred of responsibility for the future Irish economic and general development. The price hike makes short-term financial sense for Eircom's owners.

2. You say that categorising the charges for Eircom’s line rental service as being “insane” could lead consumers to believe Eircom was overcharging, and continue: “This is not based on fact since the charges for line rental are currently regulated prices as approved by ComReg from time to time. Therefore such a description is prejudicial to Eircom’s reputation and thus derogatory."
I fully agree and apologise to Eircom. We've really put the wrong organisation into the straight jacket. So let's put that right here:



ComReg made the "insane" decisions to allow Eircom to increase Irish line rental to the highest in Europe. It was "insane" not to see the immense detrimental effect this has and will have on the future development of e-Ireland.

You have even personally defended this idiotic decision, misleading the public:
Q: What about the consumers facing a 25 percent rise in line rental charges?
John Doherty: ... The context is that calls in the UK are more expensive [Sunday Business Post 14. March 2004:]
A look at the graph below from ComReg's own documents shows telephone costs to the UK consumer to be below that of the Irish consumer.

It was "insane" of ComReg to approve the Vulnerable User Scheme with Eircom, which is solely a vehicle to get the line rental price hike around the restrictions of the existing price cap. The terms of the Vulnerable User Scheme are indefensible: They are incompatible with the right of the consumer to be able to be in control of his/her expenses and they allow Eircom to take anticompetitive advantage: only customers with Eircom are able to get a reduction of line rental.



The figures published by ComReg to show how cheap Irish telephony is, show, on "sane" inspection how ComReg has allowed the most ludicrously anticompetitive development to happen in Ireland: Ireland, regulated by ComReg, has not only the highest line rental in Europe (blue column), but the most anticompetitive pricing structure by far (look at the unique relation of the fixed line [blue] column to the usage [purple] column!). It was "insane" to allow one company (eircom) to hike the price where no competition is possible (line rental) and thereby make it nearly impossible for competitors to bring advantages to the Irish customer on the rest of the pricing.

ComReg's "insane" decision to allow the high and anticompetitive line rental, has dire consequences, namely a frightening reduction of fixed line holders in Ireland. It is now down to 83% of households.
The following graph from the Swiss regulator shows the number of phone lines per 100 inhabitants. Ireland with about 1.6 million lines per 4 million inhabitants would range at a very low 40%!



As fixed line access is the main carrier medium for dsl broadband internet, (we have little cable, and wireless and satellite are not meant to be the general bb access path), Ireland will consequently find it very hard to develop dsl Internet penetration rates as our neighbours.
Currently Ireland is one of the worst countries in Europe for broadband development - only Greece is worse.

This brings me to my last point:
How will ComReg achieve Dermot Ahern's modest policy directive, to bring Ireland to at least the average of the EU countries (excluding accession countries) by mid 2005 with respect to broadband availability and enduser broadband uptake?
Not if ComReg goes on to make such "insane" regulations.
Will ComReg publish the criteria for bb availability and enduser bb uptake?
Will ComReg publish Ireland's current position?
Will ComReg publish a quarterly update on eventual achievements?


Regards

A Smart Telecom user
writing instead of the boss

resources:

siliconrepublic article:


Telcos’ knuckles rapped

21.04.2004 - ComReg has censured three telecoms operators for breaching a code of practice that covers advertising their services.
The telecoms regulator found that an Eircom telesales representative made misleading statements during the course of a call to the customer of a rival telco. Separately, Esat BT and Smart Telecom were also cited for the content of advertising campaigns which were found to be derogatory towards Eircom.

Complaints against Esat BT were understood to centre on a series of posters that ran in public places such as bus shelters. The text of these adverts referred to an alleged “ripoff” by Eircom.

In an ad that ran in the Irish Independent on 19 January, Smart had alleged “Eircom’s fixed line price hike is insane. Switch to Smart Telecom now and stop the madness”. The ad also showed a person in a straitjacket.

In its investigation following a complaint, ComReg said that categorising the charges for Eircom’s line rental service as being “insane” could lead consumers to believe Eircom was overcharging. “This is not based on fact since the charges for line rental are currently regulated prices as approved by ComReg from time to time. Therefore such a description is prejudicial to Eircom’s reputation and thus derogatory,” the regulator’s office said in a statement. “Smart Telecom are fully aware of the legal basis for the line rental charges.”

ComReg added that the statement also misleads consumers into thinking that by switching carriers to Smart Telecom they would no longer have to pay the fixed line rental to Eircom.

However, ComReg found that the tone of the text in the ad was not derogatory or misleading and was not in breach of the code of practice. “The information within the advertisement comparing minute call charges within Ireland between Eircom and Smart Telecom is accurate; the descriptions of Eircom’s call charges are advertising bluff and are not extreme and emotive.”

Commenting on the news, a spokesman for Smart Telecom claimed that the company had run the ad for one day and voluntarily removed it after that. Explaining the reason for running that particular text, he said it was born out of frustration that the company felt – and which it said was in the wider public domain over Eircom’s third line rental price increase in 12 months. ”The fact remains that the Irish line rental charges are substantially ahead of the European average – close to 70pc,” he claimed.

He added that Smart was keen to co-operate with the regulator but he said that the ruling leaves us free to come up with ads that will inform consumers that we bring better value.”

It is understood that no specific action is being taken against any of the telcos but ComReg has confirmed it would monitor the incidence of breaches to assess whether the processes and controls to ensure compliance put in place by operators are effective. It is unclear as to whether fines will be levied against any of the firms. ComReg has not made an indication one way or the other except to say it would “take further action as necessary”.

By Gordon Smith

Excerpt from ComReg document "CPS Code of Practice Breach - Smart Telecom Advertising Breach":

3 Finding
On foot of this complaint, ComReg conducted an investigation and following its investigation, ComReg found that;

• “eircom’s fixed line price hike is insane. Switch to Smart Telecom now and stop the madness.” The purpose of the advertisement is to inform consumers of their ability to change carriers from eircom to Smart Telecom. As such, ComReg considers the advertisement to be promotional material covered by the CPS Code of Practice. The categorisation of the charges for eircom’s line rental service as being “insane” may lead consumers to believe eircom are overcharging is not based on fact since the charges for line rental are currently regulated prices as approved by ComReg from time to time. Therefore such a description is prejudicial to eircom’s reputation and thus derogatory. The categorisation is misleading because it is not factually correct and thus deceives or is likely to deceive consumers and affect their economic behaviour and Smart Telecom are fully aware of the legal basis for the line rental charges. The further statement “Switch to Smart Telecom now and stop the madness” encourages consumers to act on the basis of derogatory information about eircom and its services and change carriers to eircom’s detriment. The statement also misleads consumers into thinking that by switching carriers to Smart Telecom they will no longer have to pay the fixed line rental to eircom. Publication of an untrue statement that is likely to cause consumers to act in such a way as to cause loss and damage to eircom is misleading

• The tone of the text of the advertisement is not derogatory or misleading. The information within the advertisement comparing minute call charges within Ireland between eircom and Smart Telecom is accurate; the descriptions of eircom’s call charges are advertising bluff and are not extreme and emotive. ComReg therefore finds the tone of the text does not amount to a breach of the Code of Practice.

• The depiction of a person in a straight jacket has not been addressed by ComReg because this complaint has been separately addressed by the Advertising Standards Authority for Ireland who upheld the complaint.

Clause 4.1 of the CPS Code of Practice states that “an operator must not release misleading or derogatory information about another operator’s service”. ComReg finds from its investigation that Smart Telecom has not complied with clause 4.1 of the Code of Practice and consequently, Smart Telecom is in breach of its obligation to be bound by the CPS Code of Practice.


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