"We are your friends. Trust me we come in peace." (Foreign investor in the movie "Mars attacks")



“The good news about these investors is that they are rational.
The company has no choice but to take action where it believes its rights are being infringed. This is the only way...if people in the Republic are to have access to the best broadband services.” (David McRedmond, Eircom)

David McRedmond’s recent outburst of deliberate misinformation in an Irish Times article disqualifies him more and more from participating in meaningful debate.
Some think David to be a master of propaganda, when in fact his pathetic attempts to bend the truth are easily exposed.

We quote David's article from the Irish Times in full and comment on it.

But first the EC chart that caused McRedmond’s rage and a quote of McRedmond to remind us of the sort of deliberate misinformation this man spread earlier.

What David had to say about Ireland’s broadband success in September 2004 (on a RTE 1 interview with Shane McElhatton):
"We are getting very close to the levels of Germany, the UK, Luxembourg, Portugal and we would expect to catch up with those countries fairly soon."
"We believe that very soon we’ll be up there with...we’ve passed Greece, we’ve passed Luxembourg, we’re catching up with the UK and Germany and we see ourselves moving up that table very fast."


The official 2005 EC Broadband Penetration table. Click on the chart for bigger version.

[McRedmond] "A feature article in last week's Business This Week argued that the Republic is behind on broadband. This is based on league tables of broadband penetration in the European Union. However, this does not convey the true picture of what really is happening with broadband.
Here are the facts:
• The growth rate of broadband in the Republic in 2004 was the highest in the EU.
• The actual growth per capita was above the EU average."

[Comment] After the spectacularly disastrous results for Ireland with both the EU and OECD broadband penetration tables can no longer be dismissed, it is Eircom's newest line of defense to show Ireland’s “fantastic broadband growth figures” (Stockholm syndrome sufferers ComReg and DCMNR are just as culpable as the incumbent).
The argument put forward is pathetic and easily dismissed:
The “fantastic” percentage growth rates refered to are meaningless figures, only indicating Ireland’s backwardness.
Genuine broadband growth figures have just been published by the OECD and looking at them should put an end to using the misleading argument of our “superb” broadband growth:
Ireland grew its broadband customer base by a mere 2.55 users per 100 inhabitants, which is the second worst growth rate of the EU-15 (only Greece had a worse growth rate – on the other end of the scale SouthKorea had a low broadband growth, as its broadband penetration level has achieved saturation level).


The official OECD Broadband net increase table. Click on the chart for bigger version.

[McRedmond] "• Eircom was one of the first incumbent telecoms to double the speed of its products at no cost to the consumer."

[Comment] Eircom’s overpriced and throttled adsl offers had their download speed doubled – after Smart published its uncapped 2 Mb offer for € 35/month (including € 25 worth of line rental for the first 100 000 sign-ups) – Eircom’s volume caps and the up-load speed have stayed dismal. If Eircom’s “doubling” of adsl speed is to demonstrate anything then it is this: Eircom will only loosen its suffocating grip on the Irish Internet user when forced to do so.

[McRedmond] "• Actual prices, taking account of promotional discounts, are towards the lower end in the EU and standard prices have fallen dramatically."

[Comment] Not true. Eircom’s adsl offers are dearer than the EU average according to official EC statistics. While these figures are compared without taking account of promotional pricing, Eircom cannot show that its pricing would be lower when promotional pricing were included in the comparison. In fact in most EU countries promotional offers like the ones offered by Eircom since 2004 are in place since many years.

[McRedmond] "• Broadband availability is on a par with our European neighbours and ahead of many (while we cannot be complacent about the frustrations of those customers who cannot yet get broadband)."

[Comment] Not true. Broadband availability in Ireland is currently at around 60% according to Eircom’s own admission: Eircom claims that 80% of lines originate from broadband enabled exchanges and admits a Broadband failure rate of over 22% on these lines, which gives a theoretical end-user coverage rate for broadband of 62%. It is doubtful that even this figure is achieved in practical terms.
The Advertising Standards Authority of Ireland had just informed me that it will ask Eircom to refrain from further potentially misleading advertising of its figure of lines originating from broadband enabled exchanges (80%) as Broadband lines.
With a 60% end-user broadband coverage Ireland is probably the second worst country in the EU-15 (Greece being worse, Portugal potentially on third last place).

[McRedmond] "In a very short period, one in ten households in the State have taken up broadband."

[Comment] Not true and well known to David McRedmond not to be true: Of the 140 000 broadband connections over one third are business broadband lines (according to Eircom!). The 90 000 residential broadband connections give Ireland a dismal 6.5% household penetration range (EU-15 average is at around 20%)

[McRedmond] "This means that almost one in four PCs are connected to broadband."

[Comment] This figure is neither substantiated nor meaningful without comparison or context.

[McRedmond] "That the Republic does not score well on a static chart of broadband penetration is a function of history rather than current performance."

[Comment] And who other dictated this history than the incumbent?

[McRedmond] "(Alcatel, a leading broadband equipment vendor calculates that the Republic is about 12 months behind the UK, where BT is being widely praised for its moves on broadband (better progress than many commentators previously assumed)."

[Comment] Forfas speaks in its latest broadband study of Ireland being three years back, ComReg speaks of being up to two years behind. Where is the claim of Alcatel substantiated?


Official OECD "historic"chart of the top five broadband countries with Ireland's broadband performance sketched in. Click the chart for bigger version.

[McRedmond] "Late last year Eircom set a target to get above the EU average penetration level for broadband by December 2007, having beaten its previous target. We are determined to achieve this."

[Comment] So, Eircom has “beaten its previous target” – and we are meant to applaud? The target was to reach 100 000 broadband connections, or 2.5 connections per 100 inhabitants, which is the second lowest broadband penetration in the EU-15. What a target for a northerly, young, educated and English speaking country! Was it not for the incumbent’s actions and the regulator’s failure Ireland would be up in the tables with the other small Northerly countries.
The new target of reaching 500 000 broadband connections by December of 2007 would give us a broadband penetration of 12.5 connections per 100 inhabitants. That would be only slightly above the average EU-15 broadband penetration had at the end of 2004 (10 broadband connections per 100 inhabitants)!
So: 500 000 broadband connections by Dec 2007 should not be our goal, as it will not bring Ireland to the expected future EU average.
And: we would need to see over 3000 new connections each and every week to be on the way for even this dismal goal.

[McRedmond] "In the meantime, bemoaning our league position will not get us there faster and will only serve to paint a misleading, negative picture."

[Comment] Oh sorry for calling a spade a spade.
Michael Casey, the former assistant director general of the Central Bank recently wrote so pointedly in the Irish Times about how people who ask questions are now getting labeled as “cranks, pinkos and even unpatriotic.” “Over-optimistic nonsense is the order of the day.” There is “a cosy chorus of self-congratulation” that does not want to be disturbed.
As with everything else acknowledgement is the first step to betterment. Eircom (and regulator Comreg) are still in denial. It is not us who point out where we are that have brought Ireland into this dismal position.

[McRedmond] "That a licensing restriction prevented Eircom from rolling out an advanced broadband platform in 2001 (and caused a delay while a compliant platform was put in place) is now a moot point."

[Comment] It’s a sad reflection on the quality of our public debate and media that this bizarre and sorry excuse could be brought forward.

[McRedmond] "However, it is this delay that current league tables reflect, not the recent good performance of broadband in the Republic."

[Comment] The “recent good performance”, brought about by loosening the strangulation belt by one notch in order to save the victim from final suffocation, is mainly the effect of pent-up demand. Even with the pent-up demand Ireland’s broadband growth rate is below the OECD average. (See above)

[McRedmond] "Another implicit argument in the article is that the lack of unbundling is to blame for low broadband penetration in the State. However, any analysis across the EU shows no correlation between levels of unbundling and broadband penetration. For example, less than 1 per cent of lines in Belgium are unbundled and it has one of the highest levels of broadband penetration. Overall, only 2 per cent of lines in Europe are unbundled, accounting for only 13 per cent of broadband lines."

[Comment] The fact that unbundling is there as a potential competitive element is the important factor, not the actual number of unbundled lines.
Perhaps Point Topics most recent analysis should be recommended for reading?
“Incumbent operators are beginning to lose market share to unbundlers in countries where unbundling is well established. For example, the number of wholesale lines provided by France Telecom fell by 19,000, and that by KPN (Netherlands) fell by 22,000 as competitors switch to unbundled lines.” (Point Topic, 9th June 2005)

[McRedmond] "Most consumers do not know what unbundling is and are not interested."

[Comment] Is that meant as a serious argument? The spokesperson of the incumbent bringing forward such nonsense should be laughed out of the debate.

[McRedmond] "It is right to point out that unbundling levels in the Republic are very low but the question is why. Local loop unbundling has been available in the State since 2001. One operator claims to have unbundled 40 of Eircom's exchanges. However, the reality is that other operators have typically preferred to take up Eircom's wholesale products because these have offered a better economic return.
The range of products available to other operators to re-sell in the Republic would be the envy of operators in many European countries. That operators have largely chosen this method of market entry (connecting 35,000 customers) rather than unbundling to sell broadband is their choice. Telecoms in the State is now highly competitive (particularly in contrast with other utilities). Firms compete either with a range of wholesale services on Eircom's network or via competing infrastructures in mobile, cable and wireless. But the most insidious argument put forward by some commentators is that other operators have a right to unbundle Eircom's network, apparently in whatever way they desire. The argument is put forward that, if this is allowed, consumers would benefit from a range of hypothetical services. This argument conveniently ignores several issues. Who will pay for investment in the network? Who will upgrade the exchanges for broadband? Who will pay for stranded assets or bad debts?
The answer in almost every case is either Eircom or the consumer. An impact on either would be bad news for broadband in the Republic. Eircom is currently half way through a programme of €1 billion network investment over five years. Since its re-listing last year on the stock markets in London and Dublin, Eircom is attracting international investment into the Republic - investment for the State's telecoms infrastructure.
The good news about these investors is that they are rational and will make their investment on the basis of a likely return. Management's role is to ensure that this investment is sensible, well executed and reasonably protected. If this is done well, the company will be able to attract further investment for its customers and its network. If that investment comes under threat from what we perceive to be bad regulation, then we have to act. Eircom is entitled to the same con- stitutional rights as any citizen or other firm. The company has no choice but to take action where it believes its rights are being infringed. This is the only way for it to continue to attract the investment which is essential if people in the Republic are to have access to the best broadband services."

[Comment] What Eircom’s financial director writes on the topic of Local Loop Unbundling and Eircom’s international investors’ intention to do good for the Irish Telecommunication “customers and its network” is too grotesque a distortion of reality as to start arguing with the “points” raised.

All international investors are here to make a profit. Most realize that they will do best if they work in a way that takes account of the interests of Irish society and the workforce.

Eircom’s investors are of the other kind, which is now defined (on the Continent) as “locust” investors: Like this natural plague they descend on companies, graze them bare and leave – all with relentless efficiency, but with no regard to the consequences for society and workforce whatsoever.



We should not waste too much time and effort lambasting the nature of the locust and the person who flanks their destructive feast. We need to protect ourselves and we can no longer watch a weak and incompetent regulator fail and fail.

ComReg is neither willing nor able to supply the tune.
Like in the movie “Mars attack” we need to look beyond the invaders’ constant mantra “We come in peace”; we are in urgent need to find the melody to beat the seemingly overwhelming power of the “locusts” and ComReg is not able to supply the tune.

In fact ComReg is in many ways singing from the incumbent’s hymn sheet:
• Based on ComReg’s misinformation the Department of Communications thought, and expressed it in a directive to ComReg, Ireland could be above the EU-15 level for end-user broadband take-up and availability by June 2005. In stark contrast to this Ireland is still at second last place above Greece.

• In the run-up to achieving the directive’s goal ComReg kept misinforming the DCMNR about progress in reaching the goal. It conveniently made Eircom’s non-goal of achieving a dismal 2.5 connections/100 inhabitants (100 000 connections) its own goal.

• ComReg kept misinforming the public about Ireland’s dismal Internet penetration (in demonstrable breach of OECD rules). On the basis of a depressingly low 36% home Internet penetration figure, caused by ComReg allowing the incumbent to price Ireland’s citizens out of using and getting used to the Net, we will not make progress with Broadband development.

• ComReg repeats Eircom’s misleading claims of broadband availability. Last year, in a written statement to the DCMNR (seen under FOI) ComReg claimed that Irish broadband availability was in line with the other EU countries at then 70%, when in fact currently we are at only 60%. In its latest document (ComReg’s “Forward looking strategy”) the regulator repeats Eircom’s misleading claim that we have now a broadband availability of 80%.

• ComReg misinforms the public about the current “strong and successful broadband growth rate”, like Eircom using misleading and meaningless percentage figures instead of real OECD growth figures, which clearly show Ireland’s failure to catch up.

Resources: The latest OECD broadband penetration table shows David McRedmond's claims at the Galway broadband conference about Ireland now having overtaken several countries to be misinformation.
A glimpse at the chart should also shut up the DCMNR with their nonsense claim of Ireland going to reach the top 10% of the OECD with broadband.
No amount of MANs, group broadband schemes and broadband for schools programs will get us up the ranks where we should be, as long as we leave a regulatory body at the helm that has not a clue what it is doing.


Click on the chart for a bigger version of the official OECD broadband table.

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