Bear with me here…
Via the National Dialup Scheme Three Ireland now are getting Government money to expand their mobile broadband market into areas other broadband providers are not going. Great. The EU says that’s cool.
But Three’s network is all data with voice going over it. Where they have service they have all service. Broadband and voice. Where three doesn’t offer a service, they use Vodafone. They pay them for this. If the Government pay Three to go into an area they were not before then they can offer voice too. Fabuloso! They can dump Vodafone and save a pile. But I bet those areas have a voice service from Vodafone, o2 and Meteor already don’t they? Now the taxpayer is giving an unfair advantage to Three in the mobile area.
Photo owned by markhillary (cc)
Wouldn’t you sue if you were these boys? And then there’s eircom with some good exchanges that could have been enabled. They have good lawyers too.
So who’ll sue first?
It’s not necessary to even sue – just write a letter to the EU Competition Directorate General and they’ll shut the whole thing down as they investigate whether it’s state aid or not.
Exactly my thoughts Keith. By funding Three’s expansion in “areas not provided by broadband” the government basically becomes a public body intervening in the private market. Something that the various EU departments take a very dim view of. It wouldn’t be the first time they shut down a ham-fisted effort like this.
Obviously the dept. of Comms will first spend the money before they shut it down.
Damien,
Found Wordle on http://pbjots.blogspot.com/2008_11_01_archive.html,
but you could almost your site’s Wordle as a Christmas card!
http://www.wordle.net/gallery/wrdl/357258/Mulley%27s_Wordle
cheers,
Ciarán
@Ciarán
You’re still my fav Green Party TD, you know that, right? Don’t let Eamon’s mentions all over this gaff fool you into thinking otherwise. Thanks for the Wordle though. Blush worthy.
As if we needed proof….. from a report quoted on Silicon Rep this day…
“The ability to quickly reconcile a URL with an IP address is a key factor that influences customer experience. The recently published European City Internet Performance Index (Preliminary Report) showed the average DNS lookup speed for European ISPs at 43 milliseconds with the slowest average time was 106 milliseconds by an ISP in Lisbon.
[in their Irish study]….
Both Smart Telecom and Perlico managed to measure below the European average with other ISPs offering comparable services. Eircom and the mobile broadband services had considerably slow (sic) DNS lookup times.
Source – http://www.epitiro.com/assets/docs/Ireland%20Internet%20Performance%20Index%20Epitiro.pdf
I don’t agree at all – Did all the mobile operators have the same opportunity to improve their networks in order to serve these areas? If these areas are not served already by 3G broadband then O2/Voda/Meteor had the same opportunity as 3 to upgrade their 3G networks and use the revenue from providing broadband to these areas to fund it. I can’t see it being anti-competitive as it was a tendering process, were O2/Vodafone/Meteor excluded from putting in a similar proposal?
I agree there is a point here about state aid, but I don’t know where you are going with this. If you are the government, and you are going to intervene in the last mile marketplace, you are inevitably going to end up subsidizing somebody.
It looks to me like the government can argue quite plausibly that there has been market failure in these areas. It is entitled to get involved.
It has sought to minimise the subsidy by tendering in a fairly transparent manner.
Presumably Three have taken into account the amount of extra voice revenue they will gain from having their own networks in these areas when they decided on the price to tender. In the public transport business we call this a gross contract.
To maintain their position, Vodafone could have put in a lower tender than Three, because the costs for them of rolling out a similar network would (presumably) have been lower. But for whatever reason, it seems they were unwilling or unable to do that.
And looking at the various market shares and not taking into account any of the legal niceties, I would have to say that Three could do with all the help they can get to keep them in the market.
Antoin, there hasn’t been market failure as it is ridiculous to expect the free market to provide 100% coverage. What we do have is consistent failure from the government to understand and address the issues in regards to broadband.
Running a tender process and then awarding the actual provision to a single provider is just plain idiotic.
What they should have done instead is issue a public tender for the construction of a publicly owned broadband infra-structure that will be owned by the government but that will be open to every operator that is willing to pay for access.
The only reason why this has gone out to tender is so that the pointy heads in government can hold up their hands and state that they addressed the issue via a transparent & public process. It’s form over function and nothing more…